New CA Supreme Court Decision a Potential Boon for the Staffing Industry (Final Part of a Multi-Part Series)

As the first two parts of this article indicated, the application of the ABC test creates a daunting standard when it comes to classifying a worker as an independent contractor. That’s where the California staffing industry can make its presence felt. Staffing agencies can be a perfect resource for companies that wish to hire temporary workers, skilled or unskilled, without having to commit to long-term employment. They also can let staffing firms do what they’ve always done: pay the actual wage to the employee, cover all employment taxes, and handle all the HR work that is associated with managing temporary staff. The risks can be mitigated tremendously if companies invest in staffing firms to find what they may have gotten from independent contractors elsewhere.

Joanne Sanders, President and Founder of BOLT Staffing, agrees with this assessment. She has led BOLT since its inception in 1998, and she has navigated the company through many different regulatory hurdles over the years. Her overall experience in a staffing career has provided her with great insight into how the industry can benefit from a court ruling like Dynamex.

“More organizations will not want to risk misclassifying a contractor and will turn to the staffing and recruiting industry to employ a contract worker,” Sanders stated. “By engaging a worker through a staffing agency, the agency is responsible for properly classifying the employee and adhering to all the administrative payroll requirements. Any company engaging independent contractors must revisit the relationship in light of the new view the Court has taken.”

Some fields of work might be impacted more than others. Sanders specified how that might play out in the near future.

“This applies to all industries but certain come to mind like the beauty and wellness/spa, delivery/transportation. They can engage a staffing company to recruit or simply use us to handle payroll administration, similar to the role of a professional employer organization,” Sanders said.

We aren’t the only organization recognizing the potential shift in companies’ utilization of staffing agencies in lieu of independent contractors in light of the ruling too. The American Staffing Association, the trade group representing the staffing industry in the U.S., is also cautiously optimistic about the boost that California staffing firms can receive from the court decision.

“While it is too early to gauge the effects of the Dynamex decision on the staffing industry, it could benefit certain staffing firms that classify their temporary workers as W-2 employees. Clients may be reluctant to use independent contractors given the new, more stringent, “ABC” worker classification test espoused in Dynamex, and thus might be inclined to use such staffing firms’ services and insulate themselves from potential misclassification liability,” stated Stephen Dwyer, ASA General Counsel.

It is now clear that the staffing industry can be just the right alternative for companies to tap in the midst of a shifting California economy when it comes to independent contractors. Contract workers are not only to prone to misclassification, but they’re just plain harder to find in general. Companies can save time, money, and resources that can be applied elsewhere in their businesses by calling a staffing firm to handle the recruitment, employment, and management of contract employees. California’s economy is only getting stronger, and quality workers will continue to be elusive, so it’s time for firms to pick up the phone and call their local staffing agency today. Operate in Solano, Napa, Sonoma, Marin, or San Francisco counties? Call or email BOLT Staffing today!

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