Temporary staffing agencies expected to appeal district court ruling on 2021 labor law

(Photo by John Moore/Getty Images)

An already prolonged legal battle over a Nevada law clarifying the use of temporary employees on construction sites is probably not over.

Nevada State Contractors Board attorney Louis Ling told board members last week that American Staffing Association, which challenged a labor law passed by the Nevada State Legislature in 2021, indicated to the court and directly to him that the organization plans on appealing an order issued by District Court Judge Lynne Jones on July 2.

AB227, the bill at the center of the battle, attempts to clarify in statute that any work requiring a contractor’s license must be performed by a licensed contractor or by an employee of a licensed contractor. It removed ambiguous phrasing that had left a gray area for the use of temporary employees paid through IRS 1099-forms and “leased employees” provided by private employment agencies.

After years in legal limbo, district court rules 2021 labor law is enforceable

Jones’s final written order was issued earlier this month after three years of inaction, which prompted a labor group to successfully petition the Nevada Supreme Court to require the issuance of a final order.

The district court order lifted a temporary restraining order that for four years stopped the state from enforcing the law.

American Staffing Association’s notice of appeal is due Aug. 1, Louis told board members.

Louis added that the association’s counsel told him he wants a stay of the district court order upholding the law —  “in other words, get what he already had for three and a half years. He wanted us to agree to that, and of course, we did not.”

Louis continued, “We have warned him that he’s pursuing a motion that is very unlikely to succeed.”

David Behar, executive officer of the Nevada State Contractors Board, told the Nevada Current an appeal from the staffing agencies is “to be expected.” He echoed Ling’s assessment that he believes an appeal would not be successful.

He added that the law could be reconsidered by the Legislature, though it is not scheduled to meet until 2027. Staffing agencies could also engage directly with the Contractors Board, though Behar added they might be “too far” on the issue for that.

“We always keep the door open to talk to people and see if we can find a working solution,” he added.

Behar said the recent ruling by the district court will not change much within his office. He doesn’t expect a massive influx of new complaints related to the use of temp employees, though they will look into any that may be filed.

Behar says his office has been proactive about addressing with the industry the need for workers on construction sites to be properly licensed and employees.

The Contractors Board pushed for AB227 because of the concern about workers on construction sites being gig workers or “leased employees” who work for a staffing agency under the direction of a contractor on site. Being an employee means they are protected with workers compensation if injured.

“It’s not an issue until all of a sudden somebody is to get hurt,” said Behar. “Then it’s a rough situation to figure out. Who is to be liable? Those are the things we think about.”