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A three-way blue-collar tug of war is taking place between construction companies, unions and third-party agents before the Legislature this week. If AB 1679 passes as is, construction companies will become the "employer of record" for temporary labor obtained through employment agencies.

The bill is an attempt to define the responsible party regarding workers’ compensation, wage, hour and safety laws for temporary blue-collar employees. Currently, employment agencies such as Labor Ready and Manpower are considered the primary employers. These agencies have the responsibility to comply with the labor laws that protect the employees, such as providing WC insurance.

Those backing the bill argue that inherently for a contractor the safety of a temp worker may not be a priority since it has no bearing on the WC premium a contractor pays.

Another argument centers on penalties for violations. Contractors can be punished by having their license revoked if found they are in violation of safety, wage and WC laws. An employment agency doesn’t have a similar punishment and has little to risk if found guilty of the same violations. The environment that this double standard creates potentially puts the temporary employee at a greater risk.

AB 1679 doesn’t create a win, win, win for all three parties it affects. Someone is going to lose. Contractors would not be using labor from employment agencies if somehow the current arrangement wasn’t working for them. The same goes for the employment agencies.

In a LA Times report, Noel Wheeler, owner of CLP Resources, the largest construction-only staffing service in California, weighed in with his opinion about why contractors use his company. "They come to us because they want an employer, not a referral service."

He also said that if the bill passes in its current state, "we would have to fundamentally change our business model to comply."

This bill is a big deal, since it addresses issues surrounding the increasing use of agencies that supply temporary labor to work in warehouses, factories and construction sites. This increasing trend is susceptible to change with the passing of AB 1679.