AB 1744In current political discussions there is a lot of talk about what hurts or helps job creation and unnecessary regulation is often cited as a culprit. There is little agreement on what exactly “unnecessary” is though and people argue at both ends of the spectrum from all to none. I’m not one to advocate abolishing the EPA, the Department of Labor or the IRS. Society cannot function without rules that address real problems and protect its citizens from real harm. The importance of appropriate regulation in business is precisely why it is so important to speak out against the unnecessary kind, for example, regulations that impose significant administrative costs while addressing no real problem or providing no significant benefit. I’ve written before about this kind of unnecessary legislation and today I bring your attention to California AB 1744.

The bill “requires temporary services employers to disclose on the itemized payroll statement furnished to employees the name and address of the legal entities that secured the services of the employer and total hours worked for each legal entity.” First, almost all temporary workers are legally employees of the staffing firm that places them and most already know the name and address of the company that they are assigned to. Changes like those proposed may seem innocuous until you add up the time and cost it takes multiplied across hundreds or thousands of workers (millions nationwide). I think any business owner, not just those who are staffing providers or users of contingent workers and contract IT consultants, will recognize the additional burden these reporting requirements would impose.

The bill is a response to the heightened incidences of violations of fair and safe working condition standards, especially the failure to carry adequate worker’s compensation insurance. It seems unfair to penalize all users of contingent workers for problems within a subset. It is also unclear how these new requirements will help address this problem more effectively than existing laws, enforcement and penalties. I don’t support unfair labor practices or place workers in conditions that are hazardous and I hope, and believe, that the majority of businesses agree. Rooting out those who don’t, and punishing them under the ample existing laws is the answer. Not imposing new, ineffective reporting requirements on everybody.

Each regulation on its own may seem small and harmless and business owners may appear petty in arguing against things that are so “simple” to comply with. But all these innocuous little bills can quickly grow to a point where paperwork and compliance eat up a significant amount of time and resources – and to what end? What is really improved? I have to agree with the American Staffing Association and others in thinking that’s time and money that could be better spent elsewhere. And that’s where we come back to jobs and how regulations can stifle creation. Every penny counts, always, but especially when the economy is down and margins are extra tight. Regulations take up resources, resources that could be used in other ways: capital improvements; wage and benefit increases; hiring and more.

If you are a California resident, I urge you to join me in contacting your representative and letting them know you oppose this bill. You can click here to find your assembly member. If you’re from another state, make sure similar bills aren’t posed to slow job creation in your state. Let’s be very sure that it is really necessary and there is a clear and considerable benefit before we add more regulations to doing business.

Jerry Brenholz
President and CEO
ATR International


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