Assembly Labor Committee Approves SAFE Act to Crack Down on Fraudulent Staffing Agencies

SB 1032 advances on 5-2 vote after committee members vote “Do Pass”

SACRAMENTO, CA, UNITED STATES, June 24, 2026 /EINPresswire.com/ -- The California Assembly Committee on Labor and Employment today voted 5-2 to advance Senate Bill 1032, the Staffing Agency Fair Enforcement (SAFE) Act, marking another significant step forward in the effort to bring accountability, transparency, and fraud prevention to California’s temporary staffing industry.

SB 1032, authored by Senator Eloise Gómez Reyes, would establish a statewide registration and accountability framework for temporary staffing agencies operating in California. The bill would require staffing agencies to register annually, disclose ownership information, verify workers’ compensation coverage, maintain required financial security, and give regulators stronger tools to identify unlawful operators before workers, taxpayers, and honest businesses are harmed.

“Today’s vote sends a clear message that California is ready to confront staffing fraud and protect the businesses that follow the law,” said Robert Reid, Executive Director of the Professional Organization for Workers Employment Rights (POWER). “The SAFE Act is not anti-business. It is anti-fraud. Responsible staffing companies should not lose work to operators that evade payroll taxes, avoid workers’ compensation obligations, steal wages or hide behind shell companies.”

California already requires registration or licensing for industries such as farm labor contracting, garment manufacturing, and car washes because those industries present heightened risks to vulnerable workers and the public. Temporary staffing agencies place workers throughout California’s economy, yet the state still lacks a comparable front-end registration system for the industry.

That gap has allowed bad actors to exploit workers, undercut law-abiding competitors, and shift costs onto taxpayers. Fraudulent staffing schemes can involve concealed payroll, false or misleading certificates of insurance, employee misclassification, unpaid workers’ compensation premiums, wage theft, and layers of shell entities designed to hide the individuals ultimately responsible.

“California has strong labor laws, but those laws are only meaningful if they can be enforced,” Reid said. “When ownership is hidden, insurance cannot be verified, and operators can disappear and reopen under another name, enforcement becomes slow, expensive, and often too late. SB 1032 gives regulators, workers, and businesses the visibility they need before more harm occurs.”

Under SB 1032, compliant staffing agencies would be listed through a statewide registration system, allowing businesses and workers to verify whether an agency is properly registered before entering into a staffing relationship. The bill also strengthens accountability for repeat offenders and unlawful operators who use shell-company structures to avoid responsibility.

POWER thanked Chair Liz Ortega and the members of the Assembly Labor and Employment Committee who voted to move SB 1032 forward.

“We are grateful to the committee members who recognized that California’s staffing market needs basic rules of accountability,” Reid said. “The overwhelming majority of staffing agencies operate honestly and responsibly. They deserve a marketplace where companies compete through service, reliability, and compliance—not by evading taxes, workers’ compensation requirements or wage laws.”

What’s Next:

Following today’s approval by the Assembly Labor and Employment Committee, SB 1032 advances to the Assembly Judiciary Committee for further consideration.

About POWER
The Professional Organization for Workers Employment Rights (POWER) is a statewide association of staffing companies, employers, labor advocates, fraud investigators, attorneys, and public policy leaders committed to protecting workers, promoting fair competition, and combating fraud in California’s temporary staffing industry. POWER works to advance policies that promote transparency, accountability, and ethical business practices.

Dan Kramer
POWER
+1 949-415-8721
dan@poweraction.org

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