CA/Fraud in Temp. Employment Industry—
Suzanne Potter, producer, California News Service, a bureau of Public News Service.
The temporary staffing industry in California is plagued by wage and insurance fraud, with cases piling up in recent years, according to legal experts.
In January, a judge fined a company called Man Staffing in Ventura $650,000 for failing to provide workers’ compensation insurance. The feds prosecuted California staffing agencies for tax evasion in 2018, and again in May and December of last year.
Attorney Shaddi Kamiabipour, who spent 14 years with the Orange County District Attorney’s Office rooting out employment fraud, said many low-income workers are suffering.
Workers are victimized
“They don’t pay them the prevailing wage if it’s a prevailing-wage contract,” she said. “They discourage them from filing a work comp claim if they’re injured on the job. There’s a lot of retaliation.”
Part of the problem is a lack of regulation. State lawmakers are now considering the Staffing Agency Fair Employment (SAFE) Act. The bill would require temp agencies to register with the state and prove they have workers’ comp insurance. Supporters argue this would level the playing field, since fraudulent agencies that don’t pay for insurance have been undercutting legitimate staffing businesses.
Kamiabipour said the new standards would lay the groundwork for future prosecutions by establishing a basis for accountability.
“At the very least,” she added, “they are certifying, under the penalty of perjury, that they are aware of what their obligations are to these employees; what they’re going to be held accountable for.”
She noted that California may see more state-level prosecutions of bad actors in the staffing industry in the future. That’s because more DA offices are using a state grant that allows them to hire more attorneys specializing in workers’ comp fraud.
