Weary from spending the last two years focusing on pandemic-driven legislative agendas, state and federal lawmakers started the new year focused on the upcoming elections and a return to “normal” legislative issues. However, the first half of the year was defined by a legislative effort aimed at one of the most important segments of the industry: health care staffing. Nurse staffing agencies, which months earlier were being lauded as playing an integral part in fighting the pandemic, found themselves the subject of proposed restrictive legislation.

But it wasn’t just nurse staffing that was the target of state and federal legislatures. Bills and initiatives dealing with employers’ use of artificial intelligence, pay disclosure, predictive scheduling, and other issues made the beginning of 2022 particularly busy for the staffing industry in state houses across the country.

Through it all, ASA secured major legislative victories in an effort to ensure that its members could remain unencumbered in placing people in jobs.

Responding to claims of potential unfair pricing by hospitals, nursing homes, and assisted living facilities, legislatures in 14 states—California, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Missouri, Ohio, Oregon, Pennsylvania, and Rhode Island—considered legislation that would regulate how nurse staffing agencies operate. Almost all of the proposals would have placed limits on what staffing agencies could charge for nurse staffing services.

In response, ASA and its outside lobbyists, along with a broad coalition of nurse staffing agencies, engaged in prolonged and extensive advocacy to explain that the proposals were the wrong solution and, if enacted as drafted, would further aggravate the current nursing shortage.

As a result of these efforts, no legislation containing rate caps passed. However, several states enacted bills that regulate various aspects of operation. For an updated list of all the bills’ status and what they would mandate, visit americanstaffing.net.

On June 29, a last-minute procedural issue prevented the New Jersey legislature from passing A 1474/S 511, an onerous bill that would make it much more difficult for staffing agencies to do business in the state. Further action on the legislation is likely to take place next month.

Earlier this year, leadership of the New Jersey Staffing Alliance, an ASA-affiliated chapter—as well as ASA staff—met with the sponsors of the legislation to discuss amendments crucial to the staffing industry. After several conversations, an amended version of the bill was published. The amended bill was marginally better, but many industry suggestions were not included.

Yesterday, NJSA and ASA officials met with Sen. Cryan, primary sponsor of S 511, and urged the legislature to adopt the staffing industry’s amendments. A follow-up meeting with the senator and industry representatives will be scheduled for later this month.

The New Jersey Senate is scheduled to come back into session, and it is widely anticipated that the senate will take up A 1474/S 511 at that time. Gov. Phil Murphy has said he will issue a conditional veto of the bill, so NJSA and ASA also are working with the governor’s office. ASA will continue to keep members updated on this important situation as developments unfold.

On Oct. 18, ASA filed an amicus brief asking the U.S. Supreme Court to review a class action relevant to health care staffing agencies and others that reimburse traveling workers through per diem payments.

ASA asked the court to reverse a Ninth Circuit Court of Appeals ruling that a health care staffing agency’s payments are compensation for work and thus must be included in traveling workers’ regular rate of pay for overtime purposes. If allowed to stand, the Ninth Circuit’s decision could harm many staffing agencies, particularly in the health care sector. As many as 20 other firms face or have faced similar lawsuits.

Per diem payments may be excluded from calculation of overtime under the Fair Labor Standards Act if the payments reimburse workers for meals, incidentals, and housing incurred on behalf of the employer while working away from home. They may not, however, effectively function as compensation for work.

The plaintiffs allege that the agency’s per diem payments functioned as compensation because they were prorated when the workers did not work hours or shifts required under their contracts. The trial court rejected this argument, but the Ninth Circuit reversed, holding that a combination of factors indicated that the payments functioned as compensation for hours worked. The factors included tying the per diem deductions to shifts not worked regardless of the reason for not working. The ASA brief argues that the court incorrectly interpreted the relevant statute to prohibit such practice.

The Supreme Court reviews only a limited number of cases each session, and it will be several months before it is announced if the court will grant review of this case. ASA is represented by one of the top Supreme Court litigators in the country: Donald Verrilli, who was U.S. Solicitor General from 2011 to 2016.

ASA has filed suit against the state of Nevada challenging a law that, effective Oct. 1, 2021, would bar staffing agencies from providing skilled construction labor—the first time any state has attempted to impose an outright ban on the services a staffing agency can provide. The lawsuit, filed Aug. 31, seeks an injunction and a declaration that the law is unconstitutional.

Earlier this week, ASA staff met with U.S. Secretary of Labor Marty Walsh and Kevin Gallagher, senior adviser to U.S. Secretary of Commerce Gina Raimondo. The introductory meetings focused on the importance of the staffing industry to the U.S. economy as well as the role ASA members have played during the Covid-19 pandemic.

ASA staff apprised Secretary Walsh of the many opportunities the staffing industry offers the U.S. workforce, including flexibility and choice. Secretary Walsh noted his past dealings with the industry when he was a state legislator and the important role that staffing companies play.

Gallagher also was familiar with the industry through his previous role as deputy chief of staff for then-Rhode Island Gov. Raimondo, and noted the industry’s commitment to worker training and upskilling. Both Walsh and Gallagher suggested that this should be the first of several meetings between the staffing industry and their agencies as the economy continues to recover from the pandemic.

Learn more about ASA’s ongoing advocacy efforts on behalf of the staffing industry.

After years of effort by ASA, the Ohio Staffing & Search Association (an ASA-affiliated chapter), and allies in the Ohio Chamber of Commerce, the Ohio legislature quietly and without public fanfare repealed the state sales tax on employment services. The repeal provision, which was part of a massive state budget bill, was signed into law by Gov. Mike DeWine on June 30. The repeal becomes effective on the 91st day following enactment.

Special thanks to Tom Erb and Larry Kidd, longtime ASA members and industry leaders in Ohio, who spearheaded the final push that resulted in the win. ASA has long argued that, by increasing the cost of staffing services, the tax had an adverse effect on jobs and a negative ripple effect throughout the state economy. The influx of money flowing to the state from the American Rescue Plan Act, which Congress passed earlier this year, is believed to have mitigated lawmakers’ concerns about the loss of tax revenue that historically has been an obstacle to repeal.