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What’s the new law on paying temps?

by on
in Small Business Tax Deduction Strategies

Q. Our company hires temporary workers to assist with various short-term projects. I recently read that a new law changes how these workers are paid. How does the new legislation affect employers?

A. Gov. Arnold Schwarzenegger recently signed into law SB 940, which will change payroll practices applicable to “temporary service” workers.

Under the new law, which will go into effect in January 2009, temporary-service agencies must pay temps every week instead of every other week. The law also requires agencies to pay temps daily when they work for a client on a day-to-day basis. The new legislation creates another exception for workers on an assignment “for over 90 consecutive calendar days.” The weekly pay requirement does not apply to those employees unless they are already paid weekly.

Wages must be paid within 72 hours if a temp resigns and immediately if the agency fires the worker.

The civil and criminal penalties that can be imposed against employers for violating wage payment requirements also will apply to employers that violate the new law.

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