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AB 1897 Holds Employers Accountable in the Subcontracted Economy

SACRAMENTO —Today, Assemblymember Roger Hernández (D –West Covina) announced that AB 1897 passed the Assembly Floor on a 47-24 concurrence vote. The bill now moves to Governor Brown for his consideration.  This Assembly Bill provides protections to temporary workers when companies use staffing agencies and other labor contractors to supply workers.

“This bill has carried so much passion on both sides of the aisle this year, I have worked with various stakeholders to protect workers and above all the business community.  I want to thank my colleagues for their support on this important measure.  Currently, unscrupulous employers are utilizing the subcontracted model commonly known as ‘perma-temps’ to avoid accountability in the workplace.  Many times, the employer and the staffing agencies are able to avoid responsibility to the worker, leaving the worker without any rights to hold either party accountable if a labor violation arises,” stated Hernández.

Subcontracting applies to employment arrangements that are generally contracted out, the use of labor contractors or temporary staffing agencies.  While subcontracting is not new, this employment model has become more and more prevalent in a number of industries such as manufacturing, agriculture, and blue-collar sectors.  This ‘subcontracted economy’ has led employers to rely on temporary workers who increasingly face lower wages, fewer benefits and less job security, including wage theft.  According to the National Employment Law Project, during the 1990 to 2008 period, employment grew from 1.1 million to 2.3 million in the temporary staffing industry.  In 2013, that number grew to 2.7 million temporary workers.

According to recent labor statistics, the use of temporary and subcontracted labor represents a growing trend in today’s economy.  Nearly one-fifth of total job growth since the end of the recession in 2009 has been in subcontracted or temporary work, and these jobs are growing at ten times the rate of private sector employment as a whole.  A recent study by U.C. Berkeley found that temporary or subcontracted workers earn lower wages, fewer benefits, have less job security than regular workers, and face greater risk of workplace illness, injury and death.

“This bill focuses on companies that choose to use labor contractors to supply workers to do the work of their regular course of business.  That’s a business decision and under this bill, it would come with certain responsibilities to ensure that workers are not abused.  This bill simply clarifies who can be held liable for specified violations.  The bill protects workers from exploitation and abuses resulting from a new business model that we are seeing proliferate across all industries as we begin to emerge from the economic recession. AB 1897 is about saving good jobs, protecting legitimate employers and preserving our fragile middle-class.


Hernández proudly serves the cities of Azusa, Baldwin Park, Bradbury, City of Industry, Covina, El Monte, Glendora, Irwindale, Monrovia, West Covina and the unincorporated communities of: Bassett, Charter Oak, East Arcadia, Ramona, Royal Oaks and Valinda.  Hernández also serves as Chair of the Assembly Labor and Employment Committee and the Select Committee on Post-Secondary Access and Matriculation.

CONTACT: Primo Castro, Office: (626) 960-4457, Cell: (909) 677-0600

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