POWER Applauds Introduction of SAFE Act to Strengthen Oversight of Temporary Staffing Agencies

SACRAMENTO, Calif. - EntSun -- The Partnership Organization for Workplace Ethics and Reform (P.O.W.E.R.) today announced its strong support for the introduction of the SAFE Act (Staffing Agency Fair Enforcement Act), Senate Bill 1032, authored by State Senator Eloise Gómez Reyes, that establishes a statewide registration and compliance framework for temporary staffing agencies operating in California.

"Temporary staffing plays a vital role in California's economy, but oversight has not kept pace with the scale and complexity of third-party employment," said POWER Spokesperson Dan Kramer. "The SAFE Act introduces commonsense verification standards that help ensure workers are protected, businesses compete fairly, and public systems are not forced to absorb avoidable costs."

Addressing a Critical Oversight Gap

California is one of the few large labor markets that does not currently require comprehensive statewide registration and licensing of staffing agencies before they begin operations. This absence of front-end verification has allowed some bad actors — including operators based outside the state — to establish staffing entities, collect payments from employer clients, and fail to remit payroll taxes, insurance premiums, and other legally required obligations, as well as participate in other labor code violations, including rampant employee wage theft.

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When enforcement actions occur, fraudulent operators may dissolve the entity and reopen under a new name, restarting the cycle and leaving workers, businesses, and taxpayers exposed.

As the percentage of California's workforce employed through staffing arrangements continues to grow, the human and financial consequences of fraud increase year over year.

"This is not a partisan issue, and it is certainly not a victimless crime," Kramer added. "When uninsured employment persists, injured workers can be pushed onto taxpayer-funded healthcare programs, responsible businesses face unfair competition, and public systems become the payer of last resort."

Key Provisions of the SAFE Act

The legislation adds a new section to the Labor Code establishing baseline safeguards for staffing agencies, including:

• Mandatory annual registration with the Labor Commissioner before conducting business
• Disclosure of ownership interests, background checks, disclosure of financial condition, and outstanding liabilities
• Verified proof of active workers' compensation coverage
• A surety bond requirement to strengthen financial accountability
• Authority to issue stop-work orders for uninsured operators
• A publicly accessible registry of compliant staffing agencies
• A requirement that businesses verify registration before using staffing services
• Enforceable remedies against unregistered operators

Together, these measures shift California toward a preventative oversight model designed to detect risk before harm occurs.

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Visit http://www.poweraction.org for more information.