On March 17, 2022, California State Assemblymember Freddie Rodriguez officially introduced Assembly Bill 2614 (AB 2614)—a workers’ compensation reform bill focused on changing the way state law would apply to staffing agencies, other labor contracting firms, and their clients. In this article, our Fresno workers’ compensation defense lawyer discusses the recent work injury reform bill introduced by a lawmaker in Sacramento.
Current System: Workers from Staffing Agencies May be Covered by Agency
Under California state law (California Labor Code § 3700), all employers are required to provide workers’ compensation insurance coverage to all of their employees. There is no exception for temporary workers or other workers obtained through a staffing company or labor contractor. Under the current law, a temporary worker will generally get workers’ compensation coverage through their staffing agency. In other words, the temporary worker does not become an official “employee” of the company that they are contracted to work at—at least for the purposes of workers’ compensation. Instead, the temporary worker gets workers’ compensation coverage from their staffing agency.
The Proposed Reform: A New “Usual Course of Business” Standard
AB 2614 seeks to fundamentally change the way that workers’ compensation operates for staffing agencies and labor contractors in California. Under AB 2614, any company that retains a temporary employee to perform work/services within its “usual course of business” would be required to provide workers’ compensation insurance coverage for that individual. Put another way, the reform proposal would change the party responsible for supplying workers’ compensation coverage in many circumstances. It would be the client instead of the staffing agency.
The supporters of the proposed reform argue that this is necessary to prevent abuse in the current system. They argue that some companies are trying to keep workers’ compensation rates down by working through staffing agencies. Opponents of the bill counter that the current system operates as intended. As long as the staffing agency or labor contractor supplies adequate workers’ compensation coverage, they contend that there is no actual problem.
AB 2614 is Still a Long Way From Becoming Law
It remains to be seen whether or not Assembly Bill 2614 or any similar reform bill will become valid law in California. The legislation still needs to pass through both the California State Assembly and the California State Senate before it can reach Governor Gavin Newsom’s desk for a signature. Our legal team will keep a close watch on this AB 2614 and any other legislative efforts that could affect the rights and interests of our clients.
Schedule Confidential Consultation With a Fresno Workers’ Compensation Defense Lawyer
At Yrulegui & Roberts, our California workers’ compensation defense attorneys advocate tirelessly for the best interests of our clients. If you have any questions about your rights or responsibilities, we can help. Give us a call now or send us a direct message to arrange a fully private case review. We provide workers’ compensation defense services in Fresno County and throughout Central California.