POWER vows broader anti-fraud push after SAFE Act setback

The Partnership Organization for Workplace Ethics and Reform says the defeat of California’s SAFE Act will not slow its campaign against staffing fraud. The group plans enforcement, reporting, legal action and a return to Sacramento in 2027 with a revised bill.

Why it matters: - California’s temporary staffing industry is still facing scrutiny over payroll fraud, wage theft and workers’ compensation violations. - POWER says the failed SAFE Act effort showed there is support for reform, but also exposed the cost debate that can stall enforcement-driven legislation. - The group argues that inaction is already costing workers, honest employers and taxpayers more than prevention would.

What happened: - The Partnership Organization for Workplace Ethics and Reform thanked lawmakers, workers, responsible staffing agencies, employers and others who backed the Staffing Agency Fair Employment Act, SB 1032 (Reyes). - The California State Assembly Appropriations Committee held SB 1032 on August 13, and the bill did not advance in the 2026 legislative session. - POWER said the bill’s failure will not slow its campaign against fraud and abuse in California’s temporary staffing industry. - Executive Director Robert Reid said the problems the bill exposed did not disappear when the legislation stalled.

The details: - POWER said concerns about the state’s cost to implement the SAFE Act were a principal reason the bill was held. - The group called that view “penny wise and pound foolish,” arguing the cost of doing nothing is higher than the cost of implementation. - Reid said legislators, regulators, workers and responsible businesses acknowledged that fraud exists in the temporary staffing industry. - Reid also said California lacks enough enforcement resources to identify and stop every bad actor before damage is done. - POWER said fraudulent staffing operators evade payroll taxes, underreport payroll, operate without required workers’ compensation insurance, commit wage theft and shift costs to workers, responsible employers and taxpayers. - Reid said every dollar lost through payroll fraud, every uninsured injury and every employer forced to compete against a cheater creates a real cost. - POWER said it is expanding its efforts beyond the failed bill and will not wait for the Legislature to return in 2027. - The group said it will work directly with regulators and law enforcement agencies, monitor suspected bad actors, document potential violations, report suspected fraud, support enforcement actions and evaluate legal remedies on behalf of harmed members. - POWER will continue to collect information through a confidential reporting channel on its website for staffing agencies, workers, employers and others. - The channel is meant for reports of suspected staffing fraud, wage theft, workers’ compensation violations and other unlawful workplace practices. - POWER said its enforcement focus includes suspected workers’ compensation insurance violations, payroll and tax fraud, wage theft, payroll underreporting and other schemes that give unlawful operators an unfair competitive advantage. - Reid said POWER was created to expose fraud, protect workers and restore fairness in the industry. - POWER said it will return to Sacramento in the 2027 legislative session with a revised staffing reform proposal. - The revised proposal will reflect lessons from the 2026 process and address remaining fiscal concerns.

Between the lines: - The SAFE Act setback appears to have shifted POWER’s strategy from a single-bill push to a parallel campaign using complaints, enforcement and litigation. - POWER is also trying to build a broader coalition that can strengthen the economic case for preventive oversight. - Reid framed the legislative defeat as a public awareness win, saying the bill put staffing fraud into the policy conversation and created a foundation for future action.

What's next: - POWER plans to keep gathering tips, documenting violations and supporting enforcement actions in the meantime. - The group says it will keep organizing workers, staffing firms, employers, insurers, labor advocates, enforcement officials and policymakers ahead of a 2027 return to Sacramento. - POWER said it will continue refining its legislative pitch so the next proposal can clear fiscal objections more effectively.

The bottom line: - The SAFE Act did not become law this year, but POWER is treating the setback as a pause, not an ending, in California’s fight over staffing fraud.