Yes, it’s another dry-looking bill: Massachusetts House Bill 1393, sometimes referred to as the Reform the Employment Agency Law (REAL). But at stake, apparently, is the future of the staffing industry in Massachusetts and beyond.
There’s real power on both sides of the debate about this bill. Proponents include more than two dozen Massachusetts labor and community development groups and at least 88 Massachusetts legislators.
Each side is predicting catastrophe. “The proponents of this legislation have cast a very, very wide net,” said Stephen Dwyer, general counsel for the American Staffing Association, “which would ensnare and devastate the entire industry.”
Supporters such as MassCOSH, a Massachusetts labor group, call the legislation a vital element to stomping out “a growing crop of temporary agencies (that is) hindering our hopes for economic prosperity” in Massachusetts.
According to Marcy Goldstein-Gelb of MassCOSH, the bill is a response to the growth of temporary staffing in the state. “(The bill) is both an attempt to streamline the process that professional (staffing) agencies have to go through, and to kind of regulate some of the agencies that handle more of the blue-collar jobs,” she said.
The only evidence I could find of troublesome Massachusetts staffing firms were the brief examples on the MassCOSH fact sheet about tax and insurance fraud by two unnamed temp agencies (one has to wonder if they were agencies at all).
However, Goldstein-Gelb stated that “regardless of the inherent vulnerability” involved in hiring temps, “there’s enough of a growth in the industry” to warrant the bill. She also states that a report to be issued soon will highlight this growth in more detail.
According to Dwyer, the bill is both completely unnecessary and dangerous to the industry.
“The position of the ASA is that worker rights are paramount to us,” he said. “Temp workers are protected by all labor and employment laws that protect every employee. To the extent that there are bad actors, what is needed is greater enforcement of existing laws rather than new laws designed to create extra burden on staffing firms.
“The bill could be interpreted – and I think this is a dangerous potential – as a means to impose rate caps, and eliminate conversion fees and temp-to-hire,” Dwyer said. “Its net effect will be to make it harder to find jobs during a still fragile recovery.”
A read-through of Massachusetts H1393 reveals a proposed standard for staffing firm registration, a mandated paperwork trail for each temporary employee and some subtle changes regarding fees for temp-to-hire situations.
Issues in the bill include:
- Sections 46B-46F, which defines a standard registration process for legitimate staffing firms in Massachusetts.
Proponents say it’s necessary to establish a level playing field for all legitimate Massachusetts staffing firms. “(Detractors) say it’s cumbersome,” said Goldstein-Gelb. “Why don’t they take a look at what professional agencies have to go through now? They have to go through licensure. This is a much more streamlined process.”
Dwyer, however, says the section “goes beyond registration – this goes beyond making records available for inspection. It brings new requirements and burdens upon staffing firms that are wholly unnecessary.” He also points out that the new process would provide for registration, but eliminate licensure – which allows for agencies to charge certain fees – altogether.
- Section 46G, which proscribes a thorough job order to be furnished in writing to each temporary staffer within 72 hours of any work start date. This job order would include 13 different multilingual pieces of information regarding place of employment, dates, fees, wages and expenses.
“The piece of paper that’s required, the professional agencies are already required to provide,” Goldstein-Gelb said. “They have to provide a paper trail. They have to do it when they’re paying (the workers).”
“That would be a new requirement – paperwork,” said Dwyer. “Staffing firms place hundreds of thousands of jobs every day. (They) provide most if not all of that information orally, and that amount of paperwork would be difficult if not impossible. The fact is, if you’re a staffing firm and you don’t tell your candidates where to go, to whom, what safety equipment they’re going to need and what they’re going to earn, that staffing firm won’t be in business very long.”
- Section 46I(k), which restricts temp-to-hire fees under North American Industry Classification System (NAICS) code 54.
“It applies to anyone who is not in that classification, Code 54,” Dwyer said. “It does not use the words ‘conversion’ or ‘direct hire fees.’ But the larger issue is that it would wipe out an entire spectrum of the staffing industry, (for example) nurses, office clerical and physicians.”
So who has the upper hand?
Goldstein-Gelb says that the current version of H1393, currently pending debate by the Massachusetts Joint Labor and Workforce Development Committee, was developed with “a lot of back and forth with the (staffing) industry.” In fact, she says there’s even a staffing agency, EDA Staffing, Inc., that’s on board with the bill.
Dwyer says that the current bill is an iteration of several past dialogues, many of them hinging on the legitimate staffing industry model vs. temp workers “being picked up in the park.”
“The so-called abuses that this law would be designed to address – bait-and-switch, being lied to about Workers Comp, fraud – all of that is already protected under the existing law,” he said.
“I will say this – we have seen iterations of this bill going on ten years now. Each time it failed to pass – the reason being the proponents, well-meaning or not, are not right. The proponents are concerned about the welfare of employees, as are we.
The problem is that they are inflating any problem that may exist. We wouldn’t be successful in defeating this legislation if the claims truly bore out, if they existed to the extent that we’re hearing from them.”