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SB 1032

Staffing agencies: registration.

2025-2026 Regular Session Introduced by Eloise Reyes

Staffing agencies must register with California’s Labor Commissioner, maintain workers’ comp coverage and bonding, and employers must verify registration to use their services.

From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 3.) (June 30). Re-referred to Com. on APPR.
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Bill Summary · SB 1032

Summary of SB 1032 (2025-2026) – Staffing Agencies: Registration

Purpose and intent

SB 1032 would require staffing agencies operating in California to register with the Labor Commissioner before conducting any business in the state and to renew annually. The bill creates a new regulatory framework to vet staffing agencies, ensure workers’ compensation coverage, and deter unregistered agencies from providing staffing services.

Key provisions and changes

  • New registration regime (Labor Code, Part 8.7, added):

    • Defines roles: “Commissioner” = Labor Commissioner; “Director” = Director of Industrial Relations.
    • The Labor Commissioner is responsible for promulgating regulations to implement this part.
    • Staffing agencies must register before doing business in California and must renew annually.

  • Registration requirements (Section 2203):

    • Applicants must submit a detailed application with:
    • Names/addresses of all financially interested persons (excluding bona fide employees on salary) and their ownership interests.
    • Disclosure of any open litigation, liens, fines, taxes due, and prior violations of law.
    • Financial status and business affiliations of the agency.
    • Owner’s certification under penalty of perjury regarding truthfulness.
    • The application must show the agency’s character, competency, and responsibility after review.
    • Payment of an initial or renewal registration fee set by the Commissioner to cover administrative costs.
    • Proof of a current workers’ compensation insurance policy naming the Division of Labor Standards Enforcement as certificate holder.
    • A surety bond payable to the State of California (amount determined by the Commissioner).

  • Enforcement and compliance (Sections 2204, 2205):

    • If the Commissioner finds a staffing agency does not maintain the required workers’ compensation coverage, the agency faces denial, suspension, or revocation of registration after a hearing; the Director of Industrial Relations may issue a stop order.
    • The Industrial Relations website must list registered staffing agencies, including registration details and workers’ compensation carrier.

  • Prohibition on use of unregistered agencies (Section 2206):

    • Businesses are prohibited from using the services of a staffing agency unless the agency is registered.

  • Private right of action and remedies (Section 2207):

    • Registered staffing agencies may sue unregistered agencies or businesses that use unregistered staffing services and fail to verify registration.
    • Courts may issue injunctions to stop practices of unregistered agencies or businesses that fail to verify registration.
    • Prevailing plaintiffs may recover actual damages or statutory damages up to $75,000, plus reasonable attorney’s fees.
    • For actions filed in 2027, plaintiffs must show the defendant had actual notice of the requirements; as of 2028, notice is presumed.

Who would be affected

  • Staffing agencies: Must register, maintain ongoing compliance (including workers’ compensation coverage and bonding), and meet disclosure/financial requirements.
  • Employing businesses: Must verify staffing agency registration before engaging services; otherwise subject to enforcement actions.
  • Labor Commissioner and Director of Industrial Relations: New regulatory and enforcement responsibilities, including maintaining a public registry and overseeing compliance.

Procedural and timeline aspects

  • The act adds Part 8.7 to Division 2 of the Labor Code.
  • Registration is required before conducting business and annually thereafter.
  • If noncompliant, agencies face hearings, potential suspension/revocation, and stop orders.
  • Private enforcement via civil action is provided, with injunctive relief and damages.
  • Effective notice requirements start with 2027; by 2028 notice is presumed.

Fiscal note

The bill includes a provision stating no state reimbursement is required for local agencies or school districts because costs would arise from new crime definitions or penalties, aligning with Government Code provisions.

Compiled from official sources — confirm details with the bill’s official record.

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