The Full Desk Experience

Toby Malara [00:00:00]:
Let's just take DEI as an example. Let's say in the future there's something that comes down which definitively spells out what can and can't be done. You're going to see some states that go to move that and put that in their own state law as well, maybe even go further. Because of the makeup of their legislature, they feel like they can go even further. You're going to see other states push back and they're going to challenge the federal government and say, no, in these areas, we can do our own thing and we're going to do this. Now, that's an issue that staffing, I mean, all businesses deal with it. But staffing firms, it's particularly problematic because you could be a staffing firm in Ohio and have one or two offices, but you could place people in 20 different states. And so you gotta be up to date on all those things that are kind of going around and happening.

Kortney Harmon [00:00:48]:
Hi, I'm Kortney Harmon, director of industry relations at Crelate. This is the Industry Spotlight, a series of the Full Desk Experience, a Crelate original podcast. In this series, we will talk with top leaders and influencers who are shaping the talent industry, shining a light on popular trends, the latest news, and the stories that laid the groundwork for their success. Welcome back to another episode of the Full Desk Experience. Industry Spotlight.

Kortney Harmon [00:01:20]:
Welcome to another episode of the Full Desk Experience. I'm your host, Kortney Harmon. Today, I'm super excited to have tonight Toby Malar. Toby is the vice president of government relations at the American Staffing Association. He has over two decades of experience in government affairs and legal counsel. And let's face it, with all the legal and legislative changes and regulatory changes happening in our world today, Toby's the perfect guest to talk about everything I know nothing about. I'm super excited, Toby, to have you here. And we're going to be talking about the latest legislative changes, maybe regulatory changes and anything in between.

Kortney Harmon [00:01:56]:
So, Toby, thank you so much for joining us today. I'm super excited to get your insight because I always look forward to your talks at all the conferences that I'm at.

Toby Malara [00:02:04]:
Well, thank you, Kortney. It's great to be with you today. And I'm sorry, your assistant just left the room. We had a guest there for a second. They should come back in if they want to learn about what's going on with the Congress administration. Or he can go take a nap. Either one.

Kortney Harmon [00:02:18]:
I'm sure he's going to pick the nap. I love it. So, Toby, do me a favor. Tell me a little Bit more about your role. Vice President of Government Relations at American Staffing Association. That's a mouthful. Sounds very important. And I need to know all the things that you know.

Kortney Harmon [00:02:33]:
So we set the precedents for our audience and our listeners.

Toby Malara [00:02:36]:
Sure. So, as you know, ASA is the national trade association for the temporary staffing industry. And we have a legal department here with four lawyers involved. And we have a senior counsel who's Ed Lenz, and Ed has been with asa for over 30 years. Brittany Sakata is our general counsel and she handles legal matters for the association and spends a lot of time talking to members about their concerns on the legal side and what they're seeing. And then my job is basically to monitor the legislative and regulatory activity on the federal and state level. In essence, I'm the association's lobbyist. I also run our pac, our political action committee, which gives contributions to members of Congress and various state legislatures that support the industry's principles.

Toby Malara [00:03:28]:
So we all kind of help each other and work out because we're a relatively small shop for all the issues that we cover. But that's my primary role.

Kortney Harmon [00:03:36]:
I love it. And you're in the know of all.

Toby Malara [00:03:39]:
The things we try to be. We try to be. Although it changes very quickly lately, all.

Kortney Harmon [00:03:44]:
The time, and I can't wait to touch on that. So, I mean, let's start there. What recent changes, legislative changes have had the most impact on our staffing and recruiting world. I mean, because I'm sure it's an ever changing piece and moving puzzle piece right now.

Toby Malara [00:04:00]:
Yeah, it certainly is. And you know, the interesting thing is, as crazy as it is on the federal level, always and particularly now with all the uncertainty going on, this industry by and large has mostly been impacted by legislative challenges on the state level. And they can be in any sector. They can be the industry as a whole. In the past five years, we've seen a lot of healthcare specific legislation that has been aimed at the industry. But probably, I would say two things. The rise of healthcare legislation really just starting to come out of COVID and we're still seeing bills introduced today that want to do things as simple as have healthcare staffing firms register in a state, which is fine. We have no problem with all the way up to placing rate caps on what nurses can earn, which we're obviously very opposed to, and kind of everything in between.

Toby Malara [00:04:59]:
And then the other kind of specific issues would be the expansion of the Day and Temporary Labor Services act in Illinois and the creation of a temporary Worker Right to Know law in New Jersey. That at its base, required, among other things, equal pay and equal or cost of benefits for temporary employees working alongside permanent employees of the client. So that took me a couple seconds to explain, which should give you an idea of how complicated that is and the process that it's going through. But those are the changes, I think, over the past few years that really have had the greatest impact on the industry.

Kortney Harmon [00:05:43]:
Is there a concern that either of those two laws in those two states will trickle over to other states and it's going to be the popular demand and say, okay, is it going to hit me? Is it something like we need to pay attention to if we're not in those states right now?

Toby Malara [00:05:55]:
Yeah, it's a great question. I think, you know, originally there was a real concern that this was going to be a blueprint for other states to enact similar legislation. We got involved with our chapters. We filed lawsuits regarding various provisions of the bill. That has kind of brought things down to a halt as it's going through the legal system. And I think in a way that's made a lot of other states step back and say, okay, let's see how this plays out before we, we dive into this area. Because you know what we've heard from our members with regard to the equal pay provision in the law, that's not really a problem, that most of our members are already paying their temporary employees the same or more than the workers they work next to at a factory or an office site. The issue is this equal cost of benefits.

Toby Malara [00:06:48]:
It's very, very tricky to even begin to calculate what that means. You rely on the client to give you a lot of sensitive information. And then our overall position is it's a violation of erisa. And so as that's working its way through. To get back to your question, I think it's kind of kept states from jumping right in and introducing similar legislation to seeing how this all plays out.

Kortney Harmon [00:07:12]:
That makes sense. Let's talk about policy changes from the current administration that you're monitoring the most closely that could potentially impact staffing and recruiting firms soon. Maybe not at all, but something you're keeping a pulse on.

Toby Malara [00:07:26]:
Great question. Because we are anticipating and looking for potentially a lot of changes coming through the administration. And I think first and foremost, you have to start at immigration. And really what we're concerned about as an industry is the increase of workplace audits, making sure that our members have everything in place and they're doing things correctly. So when the audits come, they're ready, they're ready to deal with them, they're ready to work with the agents and get things done. And then kind of the fallout from that, because one of the things we're seeing is as our clients are getting ready for these same kind of audits, or they're hearing of these audits coming and they're trying to get all their ducks in a row. You have this issue of clients asking staffing for Copies of the i9s or e verification authorizations that the staffing firm has for the employees they've placed at the client site, and they want a copy of those, and they can't do that. That's illegal.

Toby Malara [00:08:28]:
That is black letter illegal law. And so making sure our members know that they have to counsel their clients and say, look, we understand why you're looking for this, but it's illegal and you're going to. We're all going to get into trouble if we do that. So we properly authorize workers to work, we go through the process, but we cannot share that information with you. So as that comes forward, that's really the one of the main issues that we're looking at. And then I'd say the other issue, which is far from being settled and very much still in development, is what impact the administration's policies regarding the DEI programs is going to have. Right now, that executive order and, and that movement by the administration only deals with federal contractors, but we're anticipating that they're going to work, to look and see how they can work it into the workplace and the private workplace. But right now, we're just trying to work with our members and have them work with their clients to make sure they know what the current state of the law is, that everybody takes a deep breath and relaxes and they continue to look at things and be prepared, working with outside counsel when additional guidance comes down to move forward, forward to make sure they're in compliance with, with the law.

Kortney Harmon [00:09:42]:
I'm going to go back to a question, because these changes that are ever occurring right now and like, we're just waiting on what's next or whatever happens, how frequently does ASA and your team update their information or staffing and recruiting firms that are looking to stay on top of everything. So can you kind of give me a cadence of how you guys do things at ASA to keep everybody informed?

Toby Malara [00:10:06]:
Yeah, okay. That's. Yeah, that's a super helpful question because we have a couple of different mediums we use. We have staffing Today, which is a daily publication that goes out to all of our members that has a legal section that Usually has anywhere from, on average, three to seven stories a day. There'll be stories in there with regards to, you know, latest state and federal movements as they're going along. We also have a section that we'll put in there as a special update. It's called ASA Advocacy. So whenever we do something or there's something particularly of interest to our members that we've been working on, whether it's on the state or federal level, we'll put that in the Staffing Today ASA Advocacy space.

Toby Malara [00:10:50]:
And then we send out what's called a weekly update, which is just a compilation of all the legal articles that appeared in the past week that goes out usually on Monday afternoon to anybody who wants to sign up for Staffing Today goes out to everybody, the weekly update. Anybody who wants to sign up for it can ask to be added to the list. And it comes out on Monday. And it's just really like a compilation of the past weekly articles. And then we have an issue that we can talk about in a few minutes in Maryland right now, a legislative issue that we're working on where we'll send out alerts to our members that have offices or are headquartered in, in this case in Maryland, updating them, asking them for help, if it's to reach out to legislative members, reach out to leadership. So that's another way that we update our members. And then we have things like the legal line video that come out monthly. And then, of course, the biggest way or the easiest way is to have people call, give us a call or send us an email.

Toby Malara [00:11:49]:
We're always happy to spend some time to chat and bring everybody up to date with the latest of what we know on whatever issues are concerning them.

Kortney Harmon [00:11:56]:
Amazing. I know you guys have all of the pieces out, but sometimes it's a lot with all the information that ASA not only provides, but the legal aspect. So thank you for clarifying. For anybody who wants to know more information as we continue to have these changes, let's talk. How can staffing agencies prepare for upcoming legislative issues, such as maybe changes in Congress, tax cuts, and any other conversations that maybe you are seeing and hearing?

Toby Malara [00:12:23]:
It's a really good question because our members and all staffing firms, all businesses, really, right. Their first and primary focus is doing business, doing what they do. And so to spend the time to monitor legislative issues or try to figure out what's going to happen next is hard for a lot of people, which is why groups like ASA or the Chamber of Commerce are around. So I think the first thing you do is, and you know, for staffing firms that's join ASA and be a member of asa. Every, every industry has their own trade association. The joke around here is in D.C. and Alexandria, where we're located, you can't swing a dead cat without hitting a trade association for an industry because they all have their own issues. They all need the representation, they all need people watching out for them.

Toby Malara [00:13:11]:
And so actually we share an office in our building. Right upstairs from us is the National Beer Wholesalers Association. Not a bad tenant to share a building with. They've got a ton of issues, right. And so their members are beer distributors and wholesalers that, you know, are kind of keeping up. So it's, it's looking for that special trade association that will monitor these issues or getting involved in local chambers of commerce, whether it's the state or the city level. In some cases you have, you know, really local chamber of commerce is just staying on top and making sure your people know what's going to happen. I mean, the thing is, is that very, very rarely do laws immediately go into effect.

Toby Malara [00:13:54]:
And so you have some time to prepare. Most of the time it's not enough, quite frankly, especially with some of the larger laws, but you have some time to prepare. So if you're staying involved and engaged with an association or group that's monitoring these issues and you know what's potentially coming, then you're going to be able to start ramping up a little bit earlier, getting in touch with your account. So let's take for example, the budget reconciliation process we're going through and we're trying to extend the tax cuts that were passed in 2017, especially the 199, a pass through deduction which benefits LLCs and similar corporations that expires. Technically it expires at the end of the year. So as an associate, as a business, you kind of have to be saying and talking to, you know, in this case, your financial people, accountant say, okay, what are we going to do if this thing doesn't get renewed? Because it's going to 2025 will be fine, but what do we need to do for 2026 when this deduction is no longer in place? So it's starting to have those conversations and then hopefully it's a moot point because the extension gets extended further and you keep moving, but it's, it's staying involved. So, you know, early on, okay, this is something that's potentially an issue down the road that we need to make sure that we keep our eye on the ball. So if this does happen.

Toby Malara [00:15:21]:
We're not caught off guard and we're ready to go and implement any changes we may need to.

Chris Hesson-Ad [00:15:28]:
Recruiting is complex. Sometimes you just need a hand, someone beside you to give you that nudge to keep you on course. Introducing the new Kortney Copilot. Copilot is Kortney's AI assistant, but it's more than just artificial intelligence. Copilot brings you recruiter intelligence. Need a quick reminder to reply to a candidate's email? Or maybe you're stuck writing up that new job description. Need a nudge to send a follow up to that client who hasn't gotten back to you? Copilot is there to help you craft it effortlessly. With over 30 skills at your fingertips, Kortney Copilot doesn't just keep you organized, it keeps you ahead of the game.

Chris Hesson-Ad [00:16:12]:
Because recruiting isn't just about filling roles, it's about building relationships. And Kortney Copilot is the partner you've been waiting for. Check us out and Kortney, the future of recruiting.

Kortney Harmon [00:16:32]:
You mentioned this a little bit ago, the independent contractor piece. How are staffing firms adapting to that Department of Labor's proposed changes? And maybe what is asa's guidance on this?

Toby Malara [00:16:45]:
So the independent contractor rules are, they're, they're kind of ping ponging back and forth between what the first Trump administration promulgated, which was a very kind of loose, broad rule to allow for easier classification for independent contractors, to the Biden rule, which tightened it up drastically. And now the Biden rule has been rescinded. And so we're kind of waiting to see what happens next. And so the, the staffing firms that use independent contractors, again, it's being involved and watching the federal level also knowing very importantly that every state has their own set of independent contractor rules and laws. And you really need to make sure that you're complying with your state as well. The issue that we're seeing, that we've been seeing since probably 2020ish, that's when we started to see a real rise in misclassification of employees as independent contractors. And that's a problem for several reasons. It's a problem because all the payments that an employer makes on the behalf of an employee to unemployment workers, comp, payroll taxes, nobody's making that.

Toby Malara [00:18:03]:
When there's an independent contractor, the independent contractor has to withhold their own taxes and, and pay that on a quarterly basis. You have no work authorization requirement with an independent contractor, meaning you're an independent contractor. Nobody's running an i9 on you. And so we're seeing this rise in misclassification because quite frankly, it's much less expensive to place an independent contractor than a temporary employee or any employee. Now we're starting. That was all in the healthcare sector. That was in response to Covid, especially with a huge increase in nurse rates that we're seeing across the country and other healthcare professionals now, we've started to see that creep into the industrial staffing and hospitality staffing world again, raising these issues where it's creating an unlevel playing field for staffing companies that are properly classifying their employees, creating potential other problems for the employees that are being misclassified. And so what we'll be doing is watching to see what the independent contractor rules say and then letting our members know what the new standard is, but also remind people, regardless of what the standard is, really make sure that you are classifying anybody that's an independent contractor.

Toby Malara [00:19:23]:
You're going through two and three times to make sure they're being classified properly. Because if they're misclassified, all the things we talked about can happen. And then if there is some sort of an enforcement action, there's a lot at stake there as well.

Kortney Harmon [00:19:38]:
All kinds of fun stuff. Toby?

Toby Malara [00:19:39]:
Yeah, I told you, it's crazy.

Kortney Harmon [00:19:42]:
Well, I think probably the most common issue or the most common thing that I'm hearing from my end is the DEI piece. You mentioned it a little bit ago. Let's go into more detail. How can staffing agencies manage the risk associated with those regulatory changes, whether it's immigration policies or DEI programs?

Toby Malara [00:20:00]:
Yeah, I mean, so the DEI programs is really interesting because we are very much in a holding pattern to see what eventually happens, what the administration decides to do when it comes to the private workforce. Because again, this is an executive order, which means it just applies to the federal contractor. So anybody placing federal contractors, they have to make sure they're in compliance with the executive orders dealing with federal contractors. But for the private workforce, we're really waiting to see how this is going to play out. And what we're seeing now, or what we're hearing from our members is obviously clients trying to get in front of it, trying to make sure they're in compliance. But you have to be careful because we don't know what we have to be in compliance with yet. And so there's a lot of, you know, let's be patient. Let's take a look and see what we're, what we're doing, what we're going to hear from the administration.

Toby Malara [00:20:52]:
How they're going to go about doing that. And of course, we know and we've seen, not that we would necessarily rely on it and say, well, okay, you don't have to do anything, but every, every one of these orders, regardless of whether it's DEI or immigration or anything in between, is going to be challenged in court. I mean, that's just the society we live in. And that's what we've seen so far. Almost every order that has been issued by the administration has been challenged in court. Some have been upheld, some have been struck down or are in the process of being obviously litigated. So there's also the making sure that you're watching the courts and saying, okay, what's going on here? What's the status? Is this actually being enforced? Is it in limbo right now as it works through the system? So again, it's trade associations, the chamber making sure. And if you're a firm that works regularly with outside counsel relying on them as well, especially good employment, law firm will have their finger on the pulse of what's the status of the latest orders and what you have to do as a staffing firm.

Toby Malara [00:21:58]:
Right now, most importantly, what we're really talking to our members about is being there for your client as, you know, a confidant. As a, you're not a client, you're working together, you're partners. And so helping them through this by just saying, look, we're not really sure what's going on yet. We're very much plugged in with asa, with outside counsel, with the chamber following all these things. And we'll let you know as things develop, what we know. But right now we're waiting for more information, and we all have to wait and see how this is going to play out.

Kortney Harmon [00:22:33]:
That's truly taking. I mean, in our industry, we always talk about being the consultant, right? Giving going above and beyond. That's next level. That's next level. Whenever it comes to, hey, I have my finger on this pulse. I will keep you updated. Let me know if you have questions. I can try to help.

Kortney Harmon [00:22:49]:
Takes the transaction out of it completely.

Toby Malara [00:22:51]:
And it's interesting because, as you know, Kortney, you've got a staffing firm that's dealing with their internal employees and their internal workforce, and they've got questions for them and they're trying to decipher what's going on and make sure that they, as a business are compliant. And then they've got to turn around to their 20, 50, 100, 500 clients and give the best Guidance they can and make sure that they know that they're aware of it and they're on top of things and their monitoring situation, they're going to keep them updated. So it's staffing firms are definitely playing a more a bigger role as a partner with their good clients. And they should be, and they should continue to do that going forward.

Kortney Harmon [00:23:32]:
I love that we talked a smidge about immigration. I know there's a lot in a holding pattern. But how might the potential changes to the H1B visa program affect those technical professional staffing firms looking to place candidates?

Toby Malara [00:23:45]:
The H1B visa program is basically set by Congress, the number of visas that are allowed. And so any kind of major changes to the program are going to have to be done through legislation. And getting anything done through legislation these next two years is going to be extremely difficult. The administration can kind of on the edges go along again with some executive orders. They can suggest some changes to be made. They can certainly increase enforcement and really be out there and making sure that anybody that's applying for an H1B visa is doing all the things they need to do. They can take much longer in going through applications. They can do certain things.

Toby Malara [00:24:32]:
For example, on the one extreme, can the administration abolish H1B visas? No, that would be. That would have to be an act of Congress. Can they make it much more difficult and much more. Not nearly as effective as far as time is concerned? Sure. Could they turn the process from three months to six months? Yeah, they could do that. So again, it's going to be a matter of making sure that we watch what the administration is saying and doing around the edges of where they can do things. And so what it's probably going to lead to, just as a guess is, is going to be you're going to need a lot of patience because it's probably going to take longer for the administration to go through the application process to get you that. They may be very quick not to renew things when they have that authority.

Toby Malara [00:25:20]:
It's certainly a developing situation, but I think any real major changes would have to come through Congress. And the process of that is. It's a long shot to say the least.

Kortney Harmon [00:25:34]:
I don't know what your thoughts are on this. How are the staffing firms navigating? Like think of the, like the patchwork of the state level pay transparency laws being enacted across the country.

Toby Malara [00:25:44]:
So let me ask you this question. I'm going to throw this back at you. Tell me what you mean by pay transparency because there's a Couple of different issues that could fall under that umbrella.

Kortney Harmon [00:25:53]:
Give me your potential issues.

Toby Malara [00:25:55]:
So what we're really looking at right now, when you talk about pay transparency, there's a couple of different issues. The, the first issue that really popped up was what we would call, or what I would call the non disclosure of previous salary history. So as we know as employers for years, one of the basic questions you would ask an applicant was how much are you making now? Or what did you make at your last job?

Kortney Harmon [00:26:22]:
Which still happens and I hear it all the time.

Toby Malara [00:26:25]:
It still happens because in a lot of places it's still legal now in some states, in a lot of states and growing, it's not legal anymore. You can't ask somebody because the process and the thought was for so many people there was a built in bias of a lower salary. And if you're asking them what their salary is, if they're reporting a salary that has been unlawfully held down, then what you're basing your new salary is, is then going to be based on this bad information. The lawmakers that want to push this banning of salary history want to create a new field and want everybody to be judged on their own merits with regards to experience, which is great. The issues that can come about are if you are dealing with somebody, let's say like a salesperson who has part of her compensation package is commission, right. Pretty standard. If I can't ask what that is, or if I can't go back to her employer, previous employer, and say, hey, Kortney said she did $15 million in sales last year, that led to $100,000 commission check. Is that true? If I can't check on that, then I don't, then I'm just basically taking their word for it.

Toby Malara [00:27:39]:
That's the one issue. The salary history is one part. And again, this is the really sticky issue for the staffing company is when we're interviewing people for an unknown position, we're interviewing people to be accountants or something. There's not an actual position. And you're trying to figure out if that person fits in the range of what your jobs usually are. The way that you can do that. People used to say, okay, what did you make in your own job? Okay, you made this much. There's no way that you would benefit from any of these jobs.

Toby Malara [00:28:11]:
So we're not even going to look at these. Now the way you do that in those states where salary history is banned is you can say something like, what would you, what are you looking to make? Or you know, the types of jobs that you would be qualified for pay between 28 and $43 an hour. Is that something that interests you? The latest in the paid transparency issue is placing ads with salary estimates. Or you place an ad in LinkedIn and there's a job for the general counsel, and they'll say something like salary range based on experiences. 200, $325,000. Right. We have no problem with that as an industry. Our issue is, is that again, when staffing firms are hiring people for their pool of available talent, they have no idea what the salary is going to be.

Toby Malara [00:29:09]:
When they put out a call for accountants or they put out, they put out an ad for somebody with certain experience in ABC to place in this kind of field, they don't know what those jobs are going to be. They're just looking to get people lined up so that when the job does come in, they've got people that they can then send on the interview or they can talk to. And then at that point they say, okay, Kortney, here you go. This is an opening. It's going to pay between 30 and $40 an hour, depending on a couple of things the client's looking for the experience factor, whatever, blah, blah, blah, blah, blah. So we've said to state lawmakers, look, we have no problem when we're interviewing for a specific job giving that salary range. But when we are interviewing or when we're putting out a request to hire people to put in our availability pool and there's no job at that time to offer, we can't do that. And that argument's been fairly successful on the state level.

Toby Malara [00:30:04]:
So for staffing firms that are operating in an area where there is a. A salary disclosure law, our advice would be, if you're looking to fill your pool of available talent, the only time that you then have to disclose a salary range is when you're actually placing them in a job or they're interviewing for a specific job. Likewise, if you are hiring somebody for a specific job, let's say you're in it, and you get a client that calls you up and says, I need a CAD5 operator, and now you're interviewing for that specific job, then at that point, if you're in the state, you should definitely put out a salary estimate with your job. Advertisement that's the latest we've seen so far on that front. I don't know if that kind of covered what you were looking at.

Kortney Harmon [00:30:50]:
That covers it. I actually wrote. It was like it was the initial first part. It's a challenge of just understanding and you also gave suggestions on how to overcome those. So and I love the piece of the if there's not a job and how to handle that because we oftentimes see that and it, it poses a lot of questions if we're not trained the right way or that employer or the staffing agencies don't teach that. Thank you for covering that. I appreciate you. You talked about an issue in Maryland.

Kortney Harmon [00:31:19]:
What's the issue in Maryland that we're, we're covering right now? Because I, I have a few more questions, but I would love to know what that, it's been eating at my brain since you mentioned it.

Toby Malara [00:31:28]:
So one of the things that we have seen from states with the re election or the Trump 2 administration 2.0, we have seen states start to say, okay, look, we're going to start knowing that there's going to be a lot of change and we're going to have to start planning on not getting as much revenue from the federal government as maybe we have in the past. And maybe it's going to be in Medicare, Medicaid, maybe it's going to be in education grants, maybe it's going to be in, in any one of these areas. But we need to be prepared. We can't just say, okay, this, everything's going to be fine. And so we've seen states start to talk about what's kind of going on. And in Maryland they have a fairly significant budget deficit. And I think they're also looking at this plan to potentially do away with some Department of Education grants or whatever the case may be. And so they have introduced a bill that is a business to business service tax bill that would place a 2.5% tax on a bunch of services.

Toby Malara [00:32:35]:
And one of the enumerated services in there is temporary staffing where they would place a 2.5% tax on your bill. It would be just like if you went to a restaurant, right? You would, you would write out your invoice to a client and the bill would be for $9,000. And then you would tack on 2.5% at the end of that client would pay it, you'd take that 2.5% and then whatever the, you know, every quarter you would remit your state tax to the Department of Revenue. In Maryland, we are fighting very hard to defeat that bill or get the temporary services industry out of it. Because when you are taxing temporary services, you are simply taxing jobs. End of story. When you look at some of the other services that are listed in this bill, you Know hairdressers or lobbyists or other services, landscaping, that's a service. Whether or not can be taxed, whether or not it should be taxed is another question.

Toby Malara [00:33:37]:
But it's an actual service. You're taxing, you're paying somebody to tend your yard, and then you're going to pay a sales tax on temporary staffing. You are simply paying a tax on jobs. Not only is that not fair, you are also in a position where you could seriously deter people from using temporary staffing.

Kortney Harmon [00:34:02]:
Yeah.

Toby Malara [00:34:03]:
Because it just, it makes it that much more expensive. Right now there's about 11 states that have some form of taxes on staffing. Some of them it's permanent placement. Some of them it's very specific industries. But by and large, most states do not have a tax, sales tax on staffing because of the fact that it's tax on jobs. So the Maryland legislature goes out on April 7, so it's about two weeks away. They have got to come up with something pretty quick if they're going to get something done by the end of the session. We have reached out to leadership, we've reached out to the committee chairs.

Toby Malara [00:34:41]:
We submitted written testimony. One of our largest members allegiance is headquartered in Maryland. They've been very active on this issue as well. So we will keep members updated. But according to your earlier point, when this bill was scheduled for a hearing last week, we sent out an alert to our folks that were either headquartered in Maryland or had offices in Maryland. And we said, wrote about the bill and said, you need to contact these people and let them know that a sales tax on staffing is a tax on jobs, and we can't have that. And we followed up with an alert Monday asking them to call leadership in the House and Senate and continue to make that point. So we're staying on it.

Toby Malara [00:35:26]:
We're going to keep working it and hopefully we'll have some good news at the end of the session. But you know, states are in a lot of trouble financially and this is certainly not an issue that's going to go away in Maryland or in other states. We've got to be prepared to really kind of protect our industry and the jobs that our members and other staffing firms fine for people.

Kortney Harmon [00:35:46]:
Amazing. I'll be actively listening to see how that goes on the 7th as well. I'm sure many others.

Kortney Harmon [00:35:53]:
So thank you for all that you're.

Kortney Harmon [00:35:55]:
Doing and helping the staffing firms be able to guide this uncertain time. So that's amazing that you guys are doing that. Is there any other trends Whether it's on a national level or a state level that you see really shaping the future of our industry.

Toby Malara [00:36:10]:
A couple years ago we would have said the. The pay equity and equal benefits cost of benefits language. And depending on how the courts rule, that may come back. But that again, seems to have quieted down for a little bit now. We haven't seen it in other states yet, but this revenue issue is going to be a problem. And so I could see states going back and looking for more money, whether it's for kind of general funds or the other issue is unemployment trust fund as they need to build up their trust funds. That could certainly be an issue. And staffing kind of gets disproportionately dinged when it comes to UI reform.

Toby Malara [00:36:46]:
I'd say from a legislative standpoint, you're going to see a couple things happen. I think. I think you're going to see states, as the administration's policies get put into place, you're going to see states either move to copy them or you're going to see states move to push back on them. Let's just take DEI as an example. Let's say in the future there's something that comes down which definitively spells out what can and can't be done. You're going to see some states that to move that and put that in their own state law as well, maybe even go further. Because of the makeup of their legislature, they feel like they can go even further. You're going to see other states push back and they're going to challenge the federal government, say no was in these areas we can do our own thing and we're going to do this.

Toby Malara [00:37:32]:
You know, that's an issue that staffing. I mean, all businesses deal with it. But staffing firms, it's particularly problematic because you can be a staffing firm in Ohio and have one or two offices, but you could place people in 20 different states. And so you got to be up to date on all those things that are kind of going around and happening. So I think that's the main issue. And then from very specific, we're starting to see, we've, over the past couple years, states really looking at moving away from a paid sick leave approach to a paid leave approach where there's no longer this requirement of being ill. It's more just of a paid leave, kind of the same accrual method. And, and you earn the time and you can use it and sometimes there's a waiting period, but instead of having to officially be sick, now you can kind of just use it whenever.

Toby Malara [00:38:28]:
And that'll be interesting to see as we move along, if that's a trend that continues going forward.

Kortney Harmon [00:38:35]:
Great insight. I have two more questions for you and I promise to let you go because I could probably pick your brain all day long. How can staffing agencies demonstrate their value? You talked about this, about when they talk to a client during these times of legislative and regulatory uncertainty. Again, maybe just how do they demonstrate their value in a different way compared to in the past, that transaction?

Toby Malara [00:38:58]:
Yeah, I mean, I think it's really continuing to expand that partnership role. Right. I mean, we always say staffing should not be commoditization. It should not be a commodity. You're actually, you know, providing a service. But part of that service is being a partner and being a consultant. And not only do you help figure out what your clients need and the best way to fill those needs, you also should be letting them know of some of these challenges that are out there or how you are responding or how you're preparing aired. It can be something as simple as we participate in E Verify, which obviously a lot of clients, you know, want to see.

Toby Malara [00:39:38]:
It can be something a lot more in depth where you're actually kind of showing off. One of the things that we have on our website is a series of toolkits that members can give to clients on various issues where it says, kind of shows and demonstrates. We have a toolkit on independent contractors and. And misclassification. We have a toolkit on co employment. So all of these things that are coming up that really are important for clients to understand that the people they're working with are on top of this, are paying attention and can be a source of information for them. I think that's one of the ways they can really demonstrate their value and lots of ways to do that. Again, being with asa, following our publications, going to conferences like Staffing Law.

Toby Malara [00:40:29]:
So our Staffing Law conference is in May, on May 8th and 9th. And there's a healthcare pre con on May 7th. The only legal conference aimed at the staffing industry. A day and a half of programming in Washington D.C. with Inside Industry experts, outside legal experts. Then being able to walk away from that conference and talk to your clients about the things that were raised or the things that you learned there, showing that you're investing in your understanding of the issues so you can be a better partner for them, I think will go a long way in these days of uncertainty, as we keep calling it, which is true.

Kortney Harmon [00:41:10]:
So go download your toolkit and sign up for The Staffing Law Conference in May.

Toby Malara [00:41:14]:
Yes, absolutely amazing.

Kortney Harmon [00:41:17]:
My last question is maybe advice to new leaders in the staffing industry. Any advice to them? Obviously we've told them to follow asa, get up on your membership to get emails. Is there any other piece of advice if they're entering this space in the industry today?

Toby Malara [00:41:34]:
Sure. This industry has a long history of really being a people industry. Networking is super, super important. And so for new leaders in this industry, taking advantage of all the networking opportunities available to you is really important. And trusting and allowing your staff to take advantage of things offered to them by either, you know, asa, like the legal conference or staffing world, or even more specifically their chapters. If you've got a headquarter or if you've got an office in a state with a really good chapter or with a chapter that's struggling and needs help, let your people get involved in that chapter because it does a couple of things. One, it gets them information because they're going to be looking at business trends through chapters, events, legislative issues. It allows them to network with other people.

Toby Malara [00:42:31]:
It allows them to network with other staffing firms. Creates opportunity for new business. So let your people be involved in those kind of events. Take advantage yourself of the networking. And if you're a member of ASA, or even if you're not a member of asa, take advantage of us. Give us a call if you've got a question. And if you are a member of asa, part of that networking. I don't mean to plug this, I don't mean to turn this into an ASA commercial, but we have peer groups where CEOs and C level executives get together once a month and talk about issues.

Toby Malara [00:43:06]:
And the peer groups are, are done based on revenue size. So you, you're talking to people that are facing the same issues that you are, maybe different parts of the country, maybe right next door to you, but all these networking opportunities because there's so much knowledge in this industry that if you can pick some of the brains of the people that have been around for a long time, it's only going to benefit you and your company and the people that work for you and your clients that you serve.

Kortney Harmon [00:43:33]:
I love that. I didn't even know about the peer groups and I'm pretty ingrained in asa, so that's amazing. Thank you for sharing that. And that's okay.

Toby Malara [00:43:40]:
Peer groups are great.

Kortney Harmon [00:43:41]:
It can be an ASA commercial. I'm okay with that, Toby.

Toby Malara [00:43:44]:
All right, great.

Kortney Harmon [00:43:46]:
Well, Toby, a big thank you to you. And sharing your expertise around legislation, regulatory, all the things that none of us breathe every single day and just putting some light on some things that are happening that we may not know about or know what's going on. So thank you. Thank you. Thank you so much for your time. And I know our listeners find value in this. And if you haven't signed up for the staffing law conference, become a member of asa. If you're not, we'll put those pieces in the show notes and if anything, on a minimal level, be a different consultant to your clients.

Kortney Harmon [00:44:20]:
Send them some of those toolkits to show them you have a finger on the pulse of our industry and you can help them as well. So, Toby, thank you so much for your time today.

Toby Malara [00:44:29]:
Kortney, thank you so much for having me. It was a great experience. I really appreciate the. The amount of time you put into coming up with questions and. And the conversation we had I thought was fantastic. And 45 minutes went by just like that.

Kortney Harmon [00:44:41]:
There we go. Look at that go. I appreciate you, sir. And until next time, keep having a pulse on our industry. Listen and follow the Full Desk Experience on whatever platform you like, and we'll see you next time.

Toby Malara [00:44:53]:
Thank you, Kortney. Thanks, everybody. Take care.

Kortney Harmon [00:44:58]:
I'm Kortney Harmon with crelate. Thanks for joining us for this episode of Industry Spotlight, a new series from the Full Desk Experience. New episodes will be dropping monthly. Be sure you're subscribed to our podcast so you can catch the next Industry Spotlight episode and all episodes of the Full Desk Experience here or wherever you listen.