New Bill Stems From California Labor Lawsuit

Sacramento, CAA California labor lawsuit filed last Fall has partially resulted in a new state Bill, yet to be signed, that will ensure an entity employing temporary workers has the necessary cash reserves or financial resources in place to pay those workers, and to not deny them any California overtime which may be their due.

According to The Press Enterprise (8/24/12), the Bill will not provide workers any additional protections under the California labor code per se. However, AB 1855 would ensure that workers are afforded all protections currently enshrined in California labor employment law.

Two firms were fined a combined $1 million following allegations a year ago that workers had not been paid for hours they had actually worked. The report also stated workers were denied minimum wage, and overtime pay that is guaranteed under provisions of the California labor code.

The Press Enterprise reported that Premier Warehousing Ventures (PWV) was fined $601,000 and Impact Logistics (IL) $499,000 by the California Department of Industrial Relations for failure to provide employees with itemized payroll records. The two firms were the employer of record for Schneider Logistics' Jurupa Valley warehouse, which forwards goods to Wal-Mart stores in the state.

There were also allegations of health and safety violations against PWV and IL, which are essentially staffing agencies serving the warehouse industry. The latter has seen a 575 percent jump in use of temp workers in the 17 years covering 1990 through 2007.

It was reported that such use of temporary workers allows some companies to skirt around regulatory compliance such as pay records, wage requirements and the payment of overtime—a definitive affront to California labor law.

Last summer, a California labor lawsuit was launched in July 2011 against NFI Industries and Warestaff, respectively the operator of a warehouse and the employment agency providing staffing. That lawsuit alleged health and safety violations in the workplace.

Nonetheless, AB 1855 is to be signed by California Governor Jerry Brown within days. The measure will ensure that any enterprise using an employment agency to source workers—or for that matter the agency that supplies the workers—has sufficient funds to pay workers under current provisions in California prevailing wage law. Their rights will also be protected and upheld under California employee labor law.