HR Management & Compliance

Legislature Considers New Pay Rules for Temps

The California
Legislature is considering a bill, S.B. 940, that would implement special pay
rules for temporary employees. The bill aims to clearly delineate termination
pay rules for temporary agencies in the aftermath of the California Supreme
Court’s Smith v. L’Oreal decision (see CWHA August 2006), which
held that day workers must be paid immediately when an assignment ends either
because it was completed according to its terms or because of discharge. Here’s
a look at the proposal.


Proposed Pay Rules for

S.B. 940 would require
that employees of “temporary services employers” (see definition below) who are
assigned to work for a client or customer be paid their wages at least weekly.
Work performed during a calendar week must be paid no later than the regular payday
of the following workweek. Likewise, an employee who completes an assignment
must be paid by the regular payday of the next workweek.

The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.

There are several
exceptions to the weekly pay requirement. First, wages would have to be paid at
the end of each workday if the temp is assigned to a client on a day-to-day
basis. This applies only if the temp’s work is not executive, administrative,
professional, or clerical. Second, wages must be paid daily if the temp is
assigned to work for a client engaged in a labor union dispute. Third, if a
temp is discharged, wages are due immediately; if the temp quits, wages are due
in 72 hours. (These are the same final paycheck time limits set out under
existing law for paying regular employees who are discharged or quit.)


Employers that don’t
follow these pay rules for temps may end up having to pay waiting-time penalties.
Initial violations carry a $100 fine for each failure to pay each employee. The
fine for subsequent violations or any willful violation is $200 per employee, plus
25 percent of the amount illegally withheld.  The proposed law only applies to employees of “temporary
services employers.” These are businesses that contract with clients or
customers to supply workers to perform services for the clients or customers;
pay workers directly from their own accounts; and retain the authority to hire,
assign, and discharge workers. We’ll keep you posted on the status of this


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