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New law puts California businesses bringing in contract workers between a rock and hard place

California has its fair share of labor laws in place to protect workers and ensure they are paid fairly, fully and on time. However, a new law that became effective January 1, 2015, is going to put a serious crimp in how California hotels, motels, bars and restaurants do business.

The law, California’s AB 1897, states that California businesses contracting temporary workers from another employer are liable to the workers if their employer fails to pay them overtime, pay them on time if they quit or are terminated, provide rest and meal breaks or is in violation of other wage-related laws. Put another way, businesses that hire contract laborers such as parking valets or landscapers are now legally liable for the contract company’s wage violations against their workers.

An employer who sends their hourly wage earners to another business to work is now deemed to be a labor contractor. The business using the employees is now deemed a client employer. There are some exceptions to the new rule, and in order to stay out of trouble with the Department of Labor, it is important to understand the new changes and what they may mean for your business. It is also a good idea for any worker regularly hired out to another business to perform tasks on their premises to find out what rights they now have if there is a wage and hour dispute.

This new law has the potential to greatly affect how hotels, motels, bars and restaurants operate. They regularly hire outside companies to take care of valet parking, janitorial services, security and window washing. Liability under this law is apt to be extremely pricey. If you do not understand how this law may affect you, speak to an experienced employment attorney and find out what you need to know.

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