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American Payroll Association (APA) Basic Guide to Payroll, 2013 Edition
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CCH® PAYROLL — 8/8/08

CA enacts wage payment rules for temporary services employers

Temporary services employers will be required to pay temporary workers on a weekly basis, or daily if an employee is assigned to a client on a day-to-day basis or to a client involved in a trade dispute, under a new statute added to California's Labor Code, effective January 1, 2009. These requirements would not apply to employees assigned to a client for over 90 consecutive calendar days unless the employer pays the employee on a weekly basis in compliance with the new statute. California's Labor Code is also amended to impose civil and criminal penalties on temporary services employers who violate certain wage payment requirements.

The new statute, Section 201.3, defines a temporary services employer as an employing unit that contracts with clients or customers to supply workers and does all of the following functions: Negotiates with clients as to time and place of work, type of work, working conditions and quality and price of services; determines the assignments or reassignments of workers, even if the workers retain a right to refuse assignments; retains authority to assign or reassign workers to other clients or customers when determined unacceptable by a specific client or customer; assigns or reassigns workers to perform services for clients or customers; sets the rate of pay of workers, whether or not through negotiation; pays workers from its own account or accounts; and retains the right to hire or terminate workers. Exempt from coverage would be bona fide nonprofit organizations providing temporary service employees to clients; certain farm labor contractors; and garment manufacturing employers, which are deemed contractors. (S.B. 940, L. 2007, enacted July 22, 2008.)

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