The California legislature recently passed a sweeping new law that will impose liability on employers who contract for labor and services.

AB 1897 (Hernández; D-West Covina; Chapter 728, Statutes of 2014), “creates new liability for employers who contract out for labor and services for the wage and hour violations or workers’ compensation violations of their subcontractor,” according to Jennifer Barrera, CalChamber policy advocate.

The purpose of the law is to hold companies accountable for wage-and-hour violations when using staffing agencies or other labor contractors to supply workers.  In brief, if a labor contractor fails to pay its workers properly or fails to provide workers’ compensation coverage for those employees, the “client employer” can now be held legally responsible and liable.

The Santa Maria Valley Chamber encourages all local employers to review this fact sheet to determine whether their contracts fall within the scope of the bill.

The new law goes into effect January 1, 2015.

Employers who have specific questions regarding existing contracts or new contracts after reviewing the fact sheet, should seek out legal counsel for advice.

View the fact sheet provided by the California Chamber of Commerce.