CALifornia's powerful new joint employer law

Last weekend, I spoke on a panel for the Coalition of Low-Wage and Immigrant Worker Advocates (CLIWA) about California's new joint employer laws.  One of the most powerful is California Labor Code sec. 2810.3, which imposes strict liability on a "client employer" for wage violations when the client employer uses workers supplied by a "labor contractor" to perform labor within the client employer's "usual course of business."  Examples are a supermarket that uses a staffing agency to supply janitors to clean its stores; a hotel resort that uses a staffing agency to supply security guards to patrol the resort; or a warehouse that uses a staffing agency to supply workers to load and unload goods.  

According to the American Staffing Association, more than three million temporary and contract employees work for American's staffing companies during an average week, and the numbers are growing.  While businesses tout the benefits of increased flexibility allowed by such arrangements, those benefits often come at the workers’ expense.  As David Weil, former Administrator of the Department of Labor’s Wage and Hour Division, persuasively argued in his highly-recommended book, “The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It,” this business strategy has generated huge profits for large corporations (and value for their investors), but has resulted in declining wages, a lack of benefits, and dangerous working conditions.

In 2014, the California Legislature passed AB 1897, which added Labor Code sec. 2810.3 to make it easier for a temporary worker to collect unpaid wages from an employer whose name doesn't appear on the worker's paycheck.  Under the law, a supermarket is automatically liable if the staffing agency shorts a janitor on  wages.  The supermarket is liable not only for paying the wages, but is also subject to hefty penalties that often accompany wage violations.  The supermarket is liable regardless of whether it knew that the staffing agency was shorting its workers' pay.  The law is meant to encourage employers to use reputable staffing agencies, and to take affirmative steps to ensure that the staffing agencies are properly compensating their employees.  

Even though Labor Code sec. 2810.3 went into effect on January 1, 2015, there are very few cases that alleged 2810.3 wage claims.  I located only a handful of trial court orders discussing 2810.3 claims, and there are no appellate decisions yet.  In my informal survey of California plaintiff-side employment lawyers, only a handful had brought claims under 2810.3.  It appears that the law is being under-enforced, whether because practitioners are unaware of its existence or because the low-wage workers who would most benefit from its enforcement are unable to locate attorneys willing to bring cases on their behalf.  It is critical that attorneys understand the power of 2810.3 - there is no need to allege or prove joint employer status to collect wages from a "client employer."  Liability is automatic, so long as the coverage requirements are met.  What more could you want?

If you believe that your employer has failed to pay you all of the wages you are owed, you may benefit from consulting a qualified plaintiff-side employment attorney.