SB1032 - Staffing agencies: registration.

Amended IN Senate May 14, 2026 Amended IN Senate April 23, 2026 Amended IN Senate April 06, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 1032 Introduced by Senator Reyes February 10, 2026 An act to add Part 8.7 (commencing with Section 2200) to Division 2 of the Labor Code, relating to employment. LEGISLATIVE COUNSEL'S DIGEST SB 1032, as amended, Reyes. Staffing agencies: registration. Existing law requires a person engaged in certain businesses to register with the Labor Commissioner, as provided. This bill would require a staffing agency agency, as defined, to register, as prescribed, with the commissioner before conducting any business in this state and annually thereafter. The bill would prohibit the commissioner from registering or renewing a registration, unless the staffing agency satisfies certain conditions, including submitting an application that is certified under penalty of perjury to the commissioner for registration or renewal of registration and providing the commissioner proof of a current workers’ compensation policy in effect for all employees, as provided. By expanding the scope of the crime of perjury, this bill would impose a state-mandated local program. If the commissioner, at any time, finds that the staffing agency does not have the current workers’ compensation insurance policy in effect for all employees, this bill would require the commissioner to deny, suspend, or revoke the registration, after a hearing, and notify the Director of Industrial Relations of that matter. The bill would also require the commissioner to post a specified list of registered staffing agencies on the internet website of the Department of Industrial Relations. The bill would prohibit a business from using the services of a staffing agency without a registration pursuant to these provisions. The bill would authorize a registered staffing agency to bring an action against an unregistered staffing agency or a business that uses the services of a staffing agency without a registration, as provided, and would authorize the court to enter into an order to enjoin the defendant from engaging in any business as a staffing agency without a registration or using the services of a staffing agency without a registration. The bill would authorize the commissioner to promulgate regulations and rules necessary to carry out these provisions. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Part 8.7 (commencing with Section 2200) is added to Division 2 of the Labor Code, to read: PART 8.7. Staffing Agencies 2200. For the purposes of this part, the following definitions apply: (a) “Commissioner” means the Labor Commissioner. (b) “Director” means the Director of Industrial Relations. (c) (1) “Staffing agency” means a “temporary services employer,” as defined in subdivision (a) of Section 201.3, or a “labor contractor,” as defined in paragraph (3) of subdivision (a) of Section 2810.3, as well as any individual, partnership, corporation, limited liability company, association, or other business entity that, for a fee or other consideration, directly or indirectly recruits, hires, employs, assigns, refers, places, furnishes, or supplies one or more workers to perform labor or services for the benefit of, or under the direction of, a third-party business or worksite employer, whether on a temporary, seasonal, leased, project-based, or ongoing basis, and which is not already defined and regulated under other sections of this code. (2) “Staffing agency” does not include any entity excluded from the definition of “labor contractor” pursuant to subparagraphs (A) to (D), inclusive, of paragraph (3) of subdivision (a) of Section 2810.3. 2201. The commissioner shall promulgate all regulations and rules necessary to carry out the provisions of this part. 2202. A staffing agency shall register with the commissioner before conducting any business in this state and annually thereafter. 2203. The commissioner shall not permit any staffing agency to register or to renew a registration, until all of the following conditions are satisfied: (a) (1) The staffing agency has submitted an application to the commissioner for registration or renewal of a registration that contains all of the following: (A) The names and addresses of all persons, except bona fide employees on stated salaries, financially interested, either as partners, associates, or profit sharers, in the staffing agency together with the amount of their respective interests. (B) Any open litigation, liens, fines, or taxes past due and disclosure of any current or past violations of this code. (C) The financial status of the staffing agency. (D) The business affiliations of the staffing agency. (2) The staffing agency owner shall sign the application and certify, under penalty of perjury, that the information they have provided on the application and in any supplementary documents or information submitted by the agency in support of the application is true and correct. (b) The commissioner, after investigation, is satisfied as to the character, competency, and responsibility of the staffing agency. (c) The staffing agency has paid an initial or renewal registration fee to the commissioner in an amount determined by the commissioner sufficient to defray the costs of administering this part. (d) The staffing agency has provided the commissioner proof that a current workers’ compensation insurance policy is in effect for the employees of the staffing agency that identifies and names as a certificate holder the Division of Labor Standards Enforcement. (e) The staffing agency has provided the commissioner a surety bond payable to the State of California in an amount determined by the commissioner. 2204. If the commissioner, at any time, finds that a staffing agency does not have a current workers’ compensation insurance policy, as described in subdivision (d) of Section 2203, in effect for the employees of the staffing agency, the commissioner shall do both of the following: (a) After a hearing, deny, suspend, or revoke registration under Section 2203. (b) Notify the director. The director shall issue and serve on the staffing agency a stop order pursuant to Section 3710.1. 2205. On the website of the Department of Industrial Relations, the commissioner shall post a list of registered staffing agencies that includes both of the following for each registered staffing agency: (a) The name, address, registration number, and effective dates of registration. (b) The carrier for the current workers’ compensation insurance policy that is in effect for the staffing agency’s employees. 2206. A business shall not use the services of a staffing agency without a registration pursuant to this part. 2207. (a) In addition to other remedies permitted by law, a registered staffing agency under this part may bring an action in superior court against an unregistered staffing agency or a business that uses the services of a staffing agency without a registration. (b) A registered staffing agency may seek injunctive relief under this section without demonstrating actual harm. (c) In an action pursuant to subdivision (a), the court may enter an order to enjoin the defendant from doing either of the following: (1) Engaging in any business as a staffing agency without a registration as required by this part. (2) Using the services of a staffing agency without a registration. (d) A registered staffing agency that prevails in an action brought pursuant to subdivision (a) shall be entitled to either of the following damages, at the election of the prevailing registered staffing agency: (1) Actual damages caused by the unregistered staffing agency or a business that used the services of a staffing agency without a registration. (2) Statutory damages not to exceed seventy-five thousand dollars ($75,000). (e) From January 1, 2027 2027, through December 31, 2027, plaintiffs in actions brought pursuant to this section shall demonstrate that the defendant had actual notice of the requirements in this section. Notice for purposes of this section may include, but not be limited to, a certified letter to a place of business, a certified letter to a designated address for service of process, or other reasonable means of written notice. As of January 1, 2028, notice of the registration requirement pursuant to this section shall be presumed. SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.