Shaw Valenza LLP
AB 1897 (text is here) This new law states that employers that use temp agencies ("labor contractors") are liable for the unpaid wages and liability for failure of the contractor to secure workers' compensation insurance. There are exceptions for certain types of labor. Additionally, this law applies only to employers of > 25 workers, who hire more than 5 temps from agencies at a time. So, for example, if your company hires a vendor to work in your manufacturing plant during a busy season. Then the vendor doesn't pay the employees. You, the employer, will be liable for those payments on the same basis as the vendor. Neat, right? Also, employers and vendors cannot contract away this liability in the service agreement.