The Worker Flexibility and Small Business Protection Act would require client companies to hire temporary workers after one year, require staffing firms to register with the US Department of Labor and pay a fee among, and establish a national test for independent contractor misclassification. It aims to protect workers classified as independent contractors, workers from temporary staffing firms and workers at corporate franchises.
The legislation, introduced by Sen. Sherrod Brown (D-Ohio), Sen. Patty Murray (D-Wash.) and Congresswoman Rosa DeLauro (D-Conn), was referred to the Senate Committee on Health, Education, Labor and Pension.
If enacted, the bill calls for:
- A ban on permatemps—an employee who performs labor for an employer for 1,040 total hours during any 12-month period shall become a direct employee of that employer.
- Temporary employees to be employees of the clients under various federal laws, such as the Federal Unemployment Tax Act, Family and Medical Leave Act, Fair Labor Standards Act, National Labor Relations Act, Occupational Safety and Health Act, Service Contract Act, and others.
- Wage parity, with limited exceptions.
- The creation of a national registry of staffing agencies, with a $1,000 registration fee plus a $250 fee per office.
- A ban on temp-to-perm conversion fees.
- Limited use of temps as replacement workers during strikes and labor disputes.
- A new standard where workers are always presumed to be employees.
- An “ABC” test where workers are only considered independent contractors if the individual is free from control and direction; the labor is performed outside the usual course of business; and the individual is engaged in an independently established business.
- A right to flexibility at work. The bill would give workers who are currently treated by their employers as independent contractors the right to maintain their scheduling flexibility.
- A violation to misclassify a worker as an independent contractor; civil penalties of $10,000 for the first violation.
- Document retention, including race and gender information; wage rates must be provided to client.
- Right-to-know notices.
- Two hours’ pay plus transportation costs if there ends up being no assignment.
- A ban on charging employees for drug tests or background checks.
- Penalties for violations.
The bill has been endorsed by the National Employment Law Project, AFL-CIO, the Service Employees International Union, and the Economic Policy Institute