Assembly Bill 1897 created section 2810.3 of the California Labor Code to hold businesses liable for wage theft and inadequate workers’ compensation coverage when they use staffing agencies or labor contractors to obtain workers. Under the prior law, a business could be held responsible for unfair labor practices only if the worker could prove joint employer status. Subsequently, many businesses were shielded from accountability when workers were denied wages or were injured from working in substandard conditions. Workers who attempted to report the unlawful labor practices were often retaliated against by the employer without any recourse. Since businesses have increasingly exploited third-party labor suppliers to acquire low-cost, temporary workers for strenuous and dangerous jobs, without being subject to the Labor Code’s provisions governing workers’ rights, California passed AB 1897 to distribute liability between the employer and the labor contractor. As a result of this legislation, vulnerable temporary workers are protected from “adverse action” from both the employer and the labor contractor for whistleblowing and can file a civil action against an employer for any wage and workers’ compensation violations.
All California businesses with 25 or more employees that use at least 6 temporary workers, provided by a labor contractor, to perform labor within their “usual course of business” must now share “all civil legal responsibility and civil liability” for subcontracted workers with the labor contractor. “Usual course of business” means the regular and customary work of a business, performed on the employer’s premises or worksite. Labor contractors do not include:
- Nonprofit, community-based organizations that provide services to workers
- Labor organizations, apprenticeship programs, or hiring halls operating pursuant to a collective bargaining agreement
- Motion picture payroll services companies
- Third parties to some employee leasing arrangements
States or any political subdivisions of the state (city, county, or special district) are also exempt from AB 1897.
Consequently, businesses may no longer escape responsibility for serious violations of subcontracted workers’ rights, as liability is imposed irrespective of whether the employer had knowledge of the violations. Given that, according to ProPublica, temporary workers face a 50% greater risk of getting injured on the job than permanent employees and are predominately composed of immigrants, they desperately need the law to protect them from abuse and manipulation.
Subcontracted workers who have been deprived of wages or valid workers’ compensation coverage may file a civil action against their employer. If you require assistance in filing such an action, please feel free to contact us.