As the California legislature approached its deadline for moving bills from the house of origin to the second house, advocacy efforts led by ASA; California Staffing Professionals, an ASA-affiliated chapter; and California lobbyists Mike Robson and Bridget McGowan of Edelstein Gilbert Robson & Smith LLC were instrumental in derailing two California bills that would have had a major negative impact on the staffing industry.

AB 331 would establish various requirements for the use of automated decision tools (ADTs), including in the employment context. Among other things, the law would require that developers and users of ADTs prepare yearly impact statements addressing the use and validity of the ADTs, prepare governance programs to manage the risk of algorithmic discrimination, notify all persons subject to a consequential decision made by an ADT, and provide an alternative selection process for individuals who choose not to be subject to ADT evaluation.

SB 809 would eliminate an employer’s ability to consider an applicant’s conviction history save for a few very narrow exceptions, such as when considering applicants for jobs in industries the government deems sensitive in nature. Thus, companies outside those industries would be prohibited from considering applicant conviction history. For those companies permitted to consider conviction history, the bill would prohibit an adverse action against an applicant due to a delay in obtaining information regarding the applicant’s conviction history, even where that delay was outside of a company’s control.

The staffing industry worked with the California Chamber of Commerce to oppose or suggest amendments to the bills. For AB 331, amendments proposed by ASA would, among other things, limit the circumstances in which candidates may opt out of ADT evaluation, thereby ensuring that staffing firms could continue to place candidates in jobs in a timely manner. For SB 809, ASA joined a coalition of employer groups in opposing the bill on the basis that it would prohibit staffing firms from conducting criminal background checks for most jobs, including in cases where staffing firm clients require background checks of potential candidates.

Following weeks of discussions and negotiations, both AB 331 and SB 809 were moved to the inactive file, meaning they will not be taken up this year. Both bills can be reconsidered during the 2024 legislative session, and ASA will re-engage if necessary next year.

As part of its ongoing efforts to bring worker misclassification issues to the attention of regulators, ASA has submitted a request to the U.S. Treasury Department under the department’s Priority Guidance Program. The ASA request seeks clarification of the legal issues relating to the use of online platforms that classify nurses and nurse aides as independent contractors, especially the obligations of the health care clients that use the services of those workers. The association’s PGP submission can be found at regulations.gov.

On May 5, the New Jersey Staffing Alliance, an ASA-affiliated chapter, along with the New Jersey Business and Industry Association—with support from ASA—filed a civil lawsuit against the state of New Jersey and various institutional and individual defendants in the U.S. District Court for the District of New Jersey. The lawsuit challenges the validity of A 1474, a first-of-its-kind law recently enacted in New Jersey that regulates the staffing industry by mandating temporary employee wage and benefits payments equivalent to those received by client employees performing similar work; limiting conversion fees; and prohibiting agencies from charging a fee for providing transportation.

Among other claims, the lawsuit alleges the new law violates the Commerce Clause of the U.S. Constitution. The lawsuit further alleges the new law’s vagueness violates the Due Process Clause of the Constitution and that it separately violates the Constitution’s Equal Protection Clause. Accordingly, the suit seeks a court order restraining the state of New Jersey from enforcing or implementing the law.

A 1474 applies to construction, light industrial, and other workers, but not to professional or clerical workers. Over the prior 10 months, ASA and NJSA, along with their member staffing agencies, engaged in an extensive grassroots campaign explaining to legislators why the bill is bad for workers and the staffing industry. Those efforts blocked three previous attempts to pass the bill, but ultimately the overwhelmingly pro-labor forces prevailed.

Since the bill’s passage, ASA, NJSA, and industry lobbyists have been in conversations with state senators. ASA and NJSA officials also met with the New Jersey Department of Labor in early March regarding forthcoming regulations implementing the new law and followed up with written suggestions regarding the regulations. Among the areas of concern were the law’s equal pay provision—including the definition of “benefits” and “same or substantially similar work”—the limitation on conversion fees, and the transportation provisions.

Section 3 of the new law, which imposes new employee notification requirements on staffing agencies, and Section 10, which prohibits retaliation against employees that exercise their rights under the law, became effective May 7. Most of the law’s other requirements are set to become effective Aug. 5. However, NJDOL officials earlier informed ASA and NJSA that it is highly unlikely that final rules will be ready by August. They also said they would proceed with a “light enforcement touch” until final regulations are published and investigators are properly trained. NJSA and ASA published a detailed issue paper about the law, which is available at americanstaffing.net.

NJSA, NJBIA, and ASA are represented by the New Jersey law firm of Javerbaum Wurgaft Hicks Kahn Wikstrom & Sinnis PC.

Representatives from ASA; the New Jersey Staffing Alliance, an ASA-affiliated chapter; and lobbyists representing staffing firms met last week with officials from the New Jersey Department of Labor and Workforce Development to discuss the pending regulations for the implementation of A 1474. Gov. Phil Murphy signed his conditional veto of A 1474 into law last month.

The hourlong meeting focused on the staffing industry’s concerns and suggestions for how state regulators might address certain sections of the new law. Among the areas of concern were the law’s equal pay provision—including the definition of “benefits” and “same or substantially similar work”—the limitation on conversion fees, and the transportation provisions.

Although state regulators were mostly in a “listen only” mode, they acknowledged that the regulations would need to clarify various parts of the new law. They said they were unlikely to meet the deadlines set out for final rules—90 days following the enactment of the law for section three and section 10, and 180 days following enactment for the rest of the law. They also said they would proceed with a “light enforcement touch” until final regulations were published and investigators were properly trained. Following the meeting, NJSA outside counsel Marc Freedman sent the department a letter offering sample language to address the industry’s various concerns. The letter is posted on americanstaffing.net.

ASA and NJSA will continue to update members as developments unfold. NJSA published an information sheet detailing the impact of the new law; it’s available to ASA members at americanstaffing.net.

California’s new pay data reporting law, SB 1162, requires staffing agencies to submit payroll employee reports that include pay information categorized by employee race, ethnicity, and sex. The law also requires certain staffing agency clients to submit separate labor contractor employee reports with the same pay data information for employees provided to the clients by staffing agencies.

Because staffing agencies have not historically maintained race and ethnicity data for their employees, California’s Civil Rights Division—at the urging of ASA—is allowing “unknown” to be reported for staffing agency employees. This exception, which only applies for the 2022 reporting year, applies to both staffing agency payroll employee reports and client labor contractor employee reports. Clients can report “unknown” on labor contractor employee reports using the template report that is available for download on CRD’s website. Staffing agencies can report “unknown” on a special staffing agency payroll employee report that is available for download here. A copy of the staffing agency payroll employee report can also be obtained by emailing paydata.reporting@dfeh.ca.gov. Note that the “unknown” category can be selected only where that information is in fact unknown and not reasonably obtainable before the filing deadline.

Additionally, on Feb. 2  ASA hosted an exclusive webinar with Adam Romero, deputy director of executive programs for CRD, on SB 1162. Although the webinar was not recorded, slides from Romero’s presentation are now available for download on CRD’s website.

Yesterday, the California Civil Rights Department published answers to frequently asked questions on SB 1162, a law enacted last year requiring staffing agencies to report to the state temporary employees’ annual “pay data” by race, ethnicity, and sex, and also requiring staffing agency clients to submit separate reports covering the employees provided by staffing agencies.

The FAQs follow a Nov. 8, 2022, meeting between ASA representatives and Adam Romero, deputy director of executive programs for CRD. The purpose of the meeting was to clarify several items of importance to the staffing industry. ASA asserted that SB 1162 requires employers (staffing agencies and clients) to report on staffing agency temporary employees assigned during a particular snapshot period, rather than all employees who were assigned within a year. ASA also requested relief from having to provide race, ethnicity, and sex data on employees for the 2022 reporting year, given that the industry has never had to provide such data and most agencies do not have processes in place for obtaining it.

The FAQs favorably reflect input from ASA. They confirm that staffing agencies and clients must report pay data only for a single “snapshot period,” or pay period, between Oct. 1 and Dec. 31 of each reporting year. CRD encourages staffing agencies and their clients to collaborate on selecting a snapshot period for pay data reporting purposes. Thus, staffing agencies and clients should work together to select a snapshot period, occurring between Oct. 1 and Dec. 31, 2022, for the 2023 filing deadline of May 10, 2023.

Second, for reporting year 2022, staffing agencies and clients can report “unknown” with respect to temporary employees’ race, ethnicity, and gender, where that information is indeed unknown and not reasonably obtainable before the filing deadline. The FAQs add that staffing agencies and clients should not expect this option in the future, and that they should implement plans to obtain accurate information from employees for subsequent reporting years.

The FAQs also clarify the threshold for determining whether staffing firms and clients are required to submit reports. The FAQs note that if a staffing agency either (a) had 100 or more employees in the snapshot period, or (b) regularly had 100 or more employees during the reporting year, it is required to submit a pay data report. Similarly, the FAQs note that if a client either (a) had 100 or more labor contractor (temporary) employees in the snapshot period—in total from all of its staffing agencies (the FAQs and law refer to such agencies as “labor contractors”), or (b) regularly had 100 or more temporary employees during the reporting year, it is required to submit a labor contractor employee report.

ASA will host an exclusive webinar on the FAQS, featuring CRD representatives, in the coming weeks.

On Jan. 6, Ohio Gov. Mike DeWine signed legislation (HB 45) passed by the legislature minutes before lawmakers adjourned in December. The bill was an end-of-year package that originally included provisions from several other bills—including HB 466, which was introduced earlier last year at the behest of nursing homes and which would have imposed rate caps, registration, and reporting requirements on health care staffing firms.

ASA and its Ohio state lobbyist Andy Bowers of the Park Street Law Group waged an intense lobbying campaign to strike the rate cap and other mandates on health care staffing firms from HB 45. The final bill signed by the governor contained none of the onerous language from HB 466, but it did include a one-time payment of $350 million to nursing homes for workforce support. Nursing homes can’t use this money to pay for staff from staffing agencies, but the additional funding is expected to mitigate some of the cost pressures that precipitated last year’s attack on staffing.

Notwithstanding the additional funding, nursing homes may renew their efforts to regulate the staffing industry during the 2023 legislative session. ASA will continue to monitor developments and engage if necessary.

For the third month in a row, an intense advocacy effort caused another postponement of a vote by the New Jersey State Senate on A 1474, ending any chance of passage this year. The effort was led by ASA; the New Jersey Staffing Alliance, an ASA-affiliated chapter; and their member staffing agencies.

The bill, which applies to construction, light industrial, and other workers—but not professional or clerical workers—would, among other things

• Mandate temporary employee wages and benefits equivalent to those received by client employees performing similar work
• Limit conversion fees
• Prohibit agencies from charging a fee for providing transportation

ASA and NJSA engaged in an extensive grassroots campaign throughout the year, explaining to senators why the bill is bad for workers and the staffing industry. The associations will continue to work with senators and the governor’s office on a compromise bill that will protect workers without harming significant segments of the New Jersey staffing business.

The next opportunity for the senate to take up A 1474 will be next year, on Feb. 2.

The New York City Department of Consumer and Worker Protection has announced it will delay enforcing the city’s artificial intelligence law (Local Law 144), which has an effective date of Jan. 1, 2023.

Details from the department’s December 2022 Update include the following: “DCWP is working on rules for Local Law 144 of 2021 (automated employment decision tools). Due to the high volume of public comments, we are planning a second public hearing. In the meantime, we will not enforce Local Law 144 until April 15, 2023.”

ASA, along with the New York Staffing Association and its lobbying firm Constantinople & Vallone Consulting, have engaged with DCWP such that any final rules take into account industry concerns. ASA will continue to work with the agency and will keep members apprised as the rulemaking process continues to unfold.

In a major win for the staffing industry, the New Jersey State Senate chose yesterday not to vote on Gov. Murphy’s conditional veto of A 1474, an onerous bill that would make it harder for staffing agencies to do business in the Garden State. ASA; the New Jersey Staffing Alliance, an ASA-affiliated chapter; and staffing agencies engaged in intense advocacy, resulting in the bill being pulled from consideration because the senate did not have enough votes for passage. This marks the second time the vote was tabled, as advocacy forestalled the bill’s passage in October.

A 1474, which applies to construction, light industrial, and other workers—but not professional or clerical workers—would, among other things

• Require staffing agencies to pay at least the average rate of pay, as well as the average cost of benefits or the cash equivalent, of what client employees performing the same or substantially similar work receive
• Impose a limitation on conversion fees
• Prohibit agencies from charging a fee for providing transportation

ASA and NJSA engaged in a prolonged grassroots campaign, explaining to senators why the bill is bad for workers and the staffing industry, and were successful in persuading one senator to introduce an alternative, more palatable, bill.

On Oct. 6, Sen. Holly Schepisi introduced S 3182. Modeled after the Massachusetts Temporary Worker Right to Know law, the legislation contains several provisions found in A 1474 that protect temporary employees but presents fewer operational issues for staffing agencies.

The senate may still take up A 1474 on Dec. 22. Between now and then, ASA will continue to urge senators to support S 3182 as a compromise bill. ASA and NJSA also will be reaching out to staffing agencies doing business in New Jersey to ask them to contact their state senators to support S 3182.