New California Trade Group Targets Illegal Workers’ Comp in Staffing Industry

The California Staffing Agency Reform Association has been established by staffing industry leaders to “clean up” the worker’s compensation marketplace for staffing.

Cal-SARA, a new nonprofit, trade association, has been formed to deal with a market that is “inundated with fraudulent and black market workers’ comp insurance.”

“The increasing demand for a contingent or variable workforce, combined with the decreasing supply of employees and workers’ compensation insurers, has allowed a massive black market to grow virtually unchecked,” Mark Bertler, executive director of Cal-SARA, said in a statement. “These illegal practices put staffing agencies, injured workers and California taxpayers at risk. Regulators have thus far been unsuccessful in policing these activities causing the situation to get worse.”

According to the group, legitimate staffing agencies are forced to compete with “scam agencies” that do not operate with legitimate workers’ comp, and these illegal operations drive prices down below the cost of doing business, creating an unfair marketplace.

California customers of the staffing industry have come to accept these illegitimate operations, the group said.

The intent of Cal-SARA is to provide education, training and legal support for its members, as well as providing assistance to regulators and insurers.