Independent Contractor Compliance Blog

Sacramento – There’s a bill sitting on the Governor Schwarzenegger’s desk, waiting to be signed into law, that affects anyone using temporary service employees in California.

State Senate Bill 940 will require temporary service employers to pay all wages each week to employees providing temporary services. Present law (before this is signed) requires temporary service employers to pay their temps twice per month.

There are a few exceptions:

• The bill requires that temp employees be paid daily if they are working on a day-to-day basis
• The bill also requires that temp employees be paid daily if they are providing services for a client engaged in a trade dispute.
• This bill would not apply to employees who are assigned to a client company for over 90 consecutive calendar days.

Other aspects of this anticipated law change:

The bill requires the employee to be paid within 72 hours if the employee quits, unless the employee provides over 72 hours notice, then he/she must be paid upon discharge. 

If the employee is terminated by the employer the law requires the employee be paid immediately upon discharge.

The bill was authored after the California Supreme Court decided in the case of Smith v. L’Oreal that companies must pay temporary workers immediately after the end of an assignment.

Governor Schwarzenegger vetoed a similar bill last October because of workers’ comp changes proposed in it. This latest version doesn’t have the workers’ comp language, so it is expected he will sign this bill into law.

What does this mean? 

The area of engaging temporary employees is coming under closer scrutiny each year and therefore, is becoming more complex as the legislature passes new laws and the enforcement agencies become more and more focused on compliance. It is becoming more and more difficult for your HR people to keep up with the changes, making the services of companies like M² Consulting and Collabrus vital to ensure compliance and provide risk mitigation.