A short look back to the mid 1900’s shows a shift in companies’ search for temporary labor. A temporary staffing agency or most popularly known as a temp agency is a recruiting firm that acts as an intermediary between candidates looking for work and companies needing short-term employees or indefinite temporary positions. Temp agency employees work for what is referred to as a “host employer” (or an employer who has general supervisory authority over the worksite) but are on the payroll of a “primary employer.” The primary employer can be either: A temp agency that hires workers and sends them to work for a host employer, or a professional employer organization (PEO) that puts a host employer’s employees on the PEO’s payroll as its own employees.
When it comes to prevailing wage, project registration requirements mandate that temporary staffing agencies must register with the DIR if the temp agency submits their own payroll as the primary employer (See CCR Title 8, § 16410). However, if the hiring contractor can submit payroll for the temp employee, the temp agency need not be DIR registered. Additionally, as referenced on the DIR’s FAQ website, “Apprenticeship requirements are the responsibility of the contractor. If a Contractor relies on the temp agency and there are problems, it is the Contractor who will be responsible for any resulting penalties.” Some of these issues can include but are not limited to not employing apprentices if it is an apprenticeable craft, late and/or DAS 140 forms not being sent for apprenticeable crafts, and/or failure to make training payments for all hours worked. Although, temp agency employees can be beneficial when it comes to saving time on training and hiring. Employers must be aware and do their due diligence to ensure they are meeting the prevailing wage requirements when they are choosing to work with temp agencies to avoid costly penalties on California State Funded Public Works project.
For more information visit: https://www.dir.ca.gov/oprl/FAQ_PrevailingWage.html