AB 1676: Employers: wage discrimination.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-09-30
Existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. Existing law establishes exceptions to that prohibition, including, among others, where the payment is made based on any bona fide factor other than sex, such as education, training, or experience. Existing law makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions. Existing law also makes it a misdemeanor for an employer to refuse or neglect to comply with the above provisions of law.
This bill would specify that prior salary cannot, by itself, justify any disparity in compensation under the bona fide factor exception to the above prohibition. By changing the definition of an existing crime, this bill would impose a state-mandated local program.
This bill would incorporate additional changes in Section 1197.5 of the Labor Code proposed by SB 1063 that would become operative only if SB 1063 and this bill are both chaptered and become effective on or before January 1, 2017, and this bill is chaptered last.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. Existing law establishes exceptions to that prohibition, including, among others, where the payment is made based on any bona fide factor other than sex, such as education, training, or experience. Existing law makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions. Existing law also makes it a misdemeanor for an employer to refuse or neglect to comply with the above provisions of law.
This bill would specify that prior salary cannot, by itself, justify any disparity in compensation under the bona fide factor exception to the above prohibition. By changing the definition of an existing crime, this bill would impose a state-mandated local program.
This bill would incorporate additional changes in Section 1197.5 of the Labor Code proposed by SB 1063 that would become operative only if SB 1063 and this bill are both chaptered and become effective on or before January 1, 2017, and this bill is chaptered last.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. Existing law establishes exceptions to that prohibition, including, among others, where the payment is made based on any bona fide factor other than sex, such as education, training, or experience. Existing law makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions. Existing law also makes it a misdemeanor for an employer to refuse or neglect to comply with the above provisions of law.
This bill would specify that prior salary cannot, by itself, justify any disparity in compensation under the bona fide factor exception to the above prohibition. By changing the definition of an existing crime, this bill would impose a state-mandated local program.
This bill would incorporate additional changes in Section 1197.5 of the Labor Code proposed by SB 1063 that would become operative only if SB 1063 and this bill are both chaptered and become effective on or before January 1, 2017, and this bill is chaptered last.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. Existing law establishes exceptions to that prohibition, including, among others, where the payment is made based on any bona fide factor other than sex, such as education, training, or experience. Existing law makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions. Existing law also makes it a misdemeanor for an employer to refuse or neglect to comply with the above provisions of law.
This bill would specify that prior salary cannot, by itself, justify any disparity in compensation under the bona fide factor exception to the above prohibition. By changing the definition of an existing crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law imposes various restrictions on employers with respect to applicants for employment. A violation of those restrictions is a misdemeanor.
This bill would prohibit an employer, including state and local government employers, from seeking salary history information about an applicant for employment, except as otherwise provided. The bill would require an employer, except state and local government employers, upon reasonable request, to provide the pay scale for a position to an applicant for employment. The bill would specify that a violation of its provisions would not be subject to the misdemeanor provision.
Existing law imposes various restrictions on employers with respect to applicants for employment. A violation of those restrictions is a misdemeanor.
This bill would prohibit an employer, including state and local government employers, from seeking salary history information about an applicant for employment, except as otherwise provided. The bill would require an employer, except state and local government employers, upon reasonable request, to provide the pay scale for a position to an applicant for employment. The bill would specify that a violation of its provisions would not be subject to the misdemeanor provision.
Existing law imposes various restrictions on employers with respect to applicants for employment. A violation of those restrictions is a misdemeanor.
This bill would prohibit an employer, including state and local government employers, from seeking salary history information about an applicant for employment, except as otherwise provided. The bill would require an employer, except state and local government employers, upon reasonable request, to provide the pay scale for a position to an applicant for employment. The bill would specify that a violation of its provisions would not be subject to the misdemeanor provision.
The Legislature finds and declares all of the following:
(a)Over the past decade, the wage gap has barely budged and wage disparities continue to persist. In 2015, the gender wage gap in California stood at 16 cents on the dollar. For women of color, wage inequality is much worse. African American women in California make just 63 cents and Hispanic women less than 43 cents for every dollar white non-Hispanic men make.
(b)The problematic practices of seeking salary history from job applicants and relying on prior salary to set employees pay rates contribute to the gender wage gap by perpetuating wage inequalities across the occupational spectrum. Women are paid less than men in 99.6 percent of occupations and are more likely to face financial penalties for taking time out of the paid workforce due to childbearing and family caregiving responsibilities.
(c)When employers make salary decisions during the hiring process based on prospective employees prior salaries or require women to disclose their prior salaries during salary negotiations, women often end up at a sharp disadvantage and historical patterns of gender bias and discrimination repeat themselves, causing women to continue earning less than their male counterparts.
(d)Government officials have recognized the discriminatory impact that prior salaries can have on women in the job market. In 2015, on Equal Pay Day, the Chair of the Equal Employment Opportunity Commission (EEOC) advised employers on important steps they could take to ensure equal pay for equal work, including eliminating discriminatory pay gaps on the basis of prior salary and the 2005 EEOC Compliance Manual states that [p]rior salary cannot, by itself, justify a compensation disparity.
(e)In July of 2015, the acting director of the federal Office of Personnel Management provided guidance on advancing pay equality in the federal government, warning that reliance on salary history could potentially adversely affect a candidate who is returning to the workplace after having taken extended time off from his or her career or for whom an existing rate of pay is not reflective of the candidates current qualifications or existing labor market conditions.
(f)Courts also have warned against relying on salary history and have stated that prior salary cannot, by itself, justify a wage disparity. In Corning Glass Works v. Brennan, (1974) 417 U.S. 188, the United States Supreme Court held that a pay differential which ar[ises] simply because men would not work at the low rates paid women ... and reflect[s] a job market in which [the employer] could pay women less than men for the same work is not based on a cognizable factor other than sex under the Equal Pay Act (Public Law 88-38) (Id., at p. 205). More recently, in Rizo v. Yovino, Fresno County Superintendent of Schools, United States District Court, Eastern District of California, Case No. 1:14-cv-0423-MJS, the district court denied summary judgment on defendants motion under the federal Equal Pay Act based on its finding that, a pay structure based exclusively on prior wages is so inherently fraught with the risk indeed, here, the virtual certainty that it will perpetuate a discriminatory wage disparity between men and women that it cannot stand, even if motivated by a legitimate non-discriminatory business purpose.(Id., at p. 16). The court went on to explain that,say[ing] an otherwise unjustified pay differential between women and men performing equal work is based on a factor other than sex because it reflects historical market forces which value the equal work of one sex over the other perpetuates the markets sex-based subjective assumptions and stereotyped misconceptions Congress passed the Equal Pay Act to eradicate. (Id., at p. 17).
(g)This act will codify existing law with respect to the provision stating that prior salary cannot, by itself, justify a wage differential under Section 1197.5 of the Labor Code.
(h)This act will also help ensure that both employers and workers are able to negotiate and set salaries based on the requirements, expectations, and qualifications of the person and the job in question, rather than on an individuals prior earnings, which may reflect widespread, longstanding, gender-based wage disparities in the labor market.
SEC. 2.Section 1197.5 of the Labor Code is amended to read:1197.5.(a)An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
(1)The wage differential is based upon one or more of the following factors:
(A)A seniority system.
(B)A merit system.
(C)A system that measures earnings by quantity or quality of production.
(D)A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, business necessity means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2)Each factor relied upon is applied reasonably.
(3)The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
(b)Any employer who violates subdivision (a) is liable to the employee affected in the amount of the wages, and interest thereon, of which the employee is deprived by reason of the violation, and an additional equal amount as liquidated damages.
(c)The Division of Labor Standards Enforcement shall administer and enforce this section. If the division finds that an employer has violated this section, it may supervise the payment of wages and interest found to be due and unpaid to employees under subdivision (a). Acceptance of payment in full made by an employer and approved by the division shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (g).
(d)Every employer shall maintain records of the wages and wage rates, job classifications, and other terms and conditions of employment of the persons employed by the employer. All of the records shall be kept on file for a period of three years.
(e)Any employee may file a complaint with the division that the wages paid are less than the wages to which the employee is entitled under subdivision (a) or that the employer is in violation of subdivision (j). The complaint shall be investigated as provided in subdivision (b) of Section 98.7. The division shall keep confidential the name of any employee who submits to the division a complaint regarding an alleged violation of subdivision (a) or (j) until the division establishes the validity of the complaint, unless the division must abridge confidentiality to investigate the complaint. The name of the complaining employee shall remain confidential if the complaint is withdrawn before the confidentiality is abridged by the division. The division shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to these employees.
(f)The department or division may commence and prosecute, unless otherwise requested by the employee or affected group of employees, a civil action on behalf of the employee and on behalf of a similarly affected group of employees to recover unpaid wages and liquidated damages under subdivision (a), and in addition shall be entitled to recover costs of suit. The consent of any employee to the bringing of any action shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (g) unless the action is dismissed without prejudice by the department or the division, except that the employee may intervene in the suit or may initiate independent action if the suit has not been determined within 180 days from the date of the filing of the complaint.
(g)Any employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of the wages, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorneys fees, notwithstanding any agreement to work for a lesser wage.
(h)A civil action to recover wages under subdivision (a) may be commenced no later than two years after the cause of action occurs, except that a cause of action arising out of a willful violation may be commenced no later than three years after the cause of action occurs.
(i)If an employee recovers amounts due the employee under subdivision (b), and also files a complaint or brings an action under subdivision (d) of Section 206 of Title 29 of the United States Code which results in an additional recovery under federal law for the same violation, the employee shall return to the employer the amounts recovered under subdivision (b), or the amounts recovered under federal law, whichever is less.
(j)(1)An employer shall not discharge, or in any manner discriminate or retaliate against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this section. An employer shall not prohibit an employee from disclosing the employees own wages, discussing the wages of others, inquiring about another employees wages, or aiding or encouraging any other employee to exercise his or her rights under this section. Nothing in this section creates an obligation to disclose wages.
(2)Any employee who has been discharged, discriminated or retaliated against, in the terms and conditions of his or her employment because the employee engaged in any conduct delineated in this section may recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief.
(3)A civil action brought under this subdivision may be commenced no later than one year after the cause of action occurs.
SEC. 2.5.Section 1197.5 of the Labor Code is amended to read:1197.5.(a)An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
(1)The wage differential is based upon one or more of the following factors:
(A)A seniority system.
(B)A merit system.
(C)A system that measures earnings by quantity or quality of production.
(D)A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, business necessity means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2)Each factor relied upon is applied reasonably.
(3)The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
(b)An employer shall not pay any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
(1)The wage differential is based upon one or more of the following factors:
(A)A seniority system.
(B)A merit system.
(C)A system that measures earnings by quantity or quality of production.
(D)A bona fide factor other than race or ethnicity, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a race- or ethnicity-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, business necessity means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2)Each factor relied upon is applied reasonably.
(3)The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
(c)Any employer who violates subdivision (a) or (b) is liable to the employee affected in the amount of the wages, and interest thereon, of which the employee is deprived by reason of the violation, and an additional equal amount as liquidated damages.
(d)The Division of Labor Standards Enforcement shall administer and enforce this section. If the division finds that an employer has violated this section, it may supervise the payment of wages and interest found to be due and unpaid to employees under subdivision (a) or (b). Acceptance of payment in full made by an employer and approved by the division shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (h).
(e)Every employer shall maintain records of the wages and wage rates, job classifications, and other terms and conditions of employment of the persons employed by the employer. All of the records shall be kept on file for a period of three years.
(f)Any employee may file a complaint with the division that the wages paid are less than the wages to which the employee is entitled under subdivision (a) or (b) or that the employer is in violation of subdivision (k). The complaint shall be investigated as provided in subdivision (b) of Section 98.7. The division shall keep confidential the name of any employee who submits to the division a complaint regarding an alleged violation of subdivision (a), (b), or (k) until the division establishes the validity of the complaint, unless the division must abridge confidentiality to investigate the complaint. The name of the complaining employee shall remain confidential if the complaint is withdrawn before the confidentiality is abridged by the division. The division shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to these employees.
(g)The department or division may commence and prosecute, unless otherwise requested by the employee or affected group of employees, a civil action on behalf of the employee and on behalf of a similarly affected group of employees to recover unpaid wages and liquidated damages under subdivision (a) or (b), and in addition shall be entitled to recover costs of suit. The consent of any employee to the bringing of any action shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (h) unless the action is dismissed without prejudice by the department or the division, except that the employee may intervene in the suit or may initiate independent action if the suit has not been determined within 180 days from the date of the filing of the complaint.
(h)An employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of the wages, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorneys fees, notwithstanding any agreement to work for a lesser wage.
(i)A civil action to recover wages under subdivision (a) or (b) may be commenced no later than two years after the cause of action occurs, except that a cause of action arising out of a willful violation may be commenced no later than three years after the cause of action occurs.
(j)If an employee recovers amounts due the employee under subdivision (c), and also files a complaint or brings an action under subdivision (d) of Section 206 of Title 29 of the United States Code which results in an additional recovery under federal law for the same violation, the employee shall return to the employer the amounts recovered under subdivision (c), or the amounts recovered under federal law, whichever is less.
(k)(1)An employer shall not discharge, or in any manner discriminate or retaliate against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this section. An employer shall not prohibit an employee from disclosing the employees own wages, discussing the wages of others, inquiring about another employees wages, or aiding or encouraging any other employee to exercise his or her rights under this section. Nothing in this section creates an obligation to disclose wages.
(2)Any employee who has been discharged, discriminated or retaliated against, in the terms and conditions of his or her employment because the employee engaged in any conduct delineated in this section may recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief.
(3)A civil action brought under this subdivision may be commenced no later than one year after the cause of action occurs.
SEC. 3.Section 2.5 of this bill incorporates amendments to Section 1197.5 of the Labor Code proposed by both this bill and Senate Bill 1063. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2017, (2) each bill amends Section 1197.5 of the Labor Code, and (3) this bill is enacted after Senate Bill 1063, in which case Section 2 of this bill shall not become operative.
SEC. 4.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The Legislature finds and declares all of the following:
(a)Over the past decade, the wage gap has barely budged and wage disparities continue to persist. In 2015, the gender wage gap in California stood at 16 cents on the dollar. For women of color, wage inequality is much worse. African American women in California make just 63 cents and Hispanic women less than 43 cents for every dollar white non-Hispanic men make.
(b)The problematic practices of seeking salary history from job applicants and relying on prior salary to set employees pay rates contribute to the gender wage gap by perpetuating wage inequalities across the occupational spectrum. Women are paid less than men in 99.6 percent of occupations and are more likely to face financial penalties for taking time out of the paid workforce due to childbearing and family caregiving responsibilities.
(c)When employers make salary decisions during the hiring process based on prospective employees prior salaries or require women to disclose their prior salaries during salary negotiations, women often end up at a sharp disadvantage and historical patterns of gender bias and discrimination repeat themselves, causing women to continue earning less than their male counterparts.
(d)Government officials have recognized the discriminatory impact that prior salaries can have on women in the job market. In 2015, on Equal Pay Day, the Chair of the Equal Employment Opportunity Commission (EEOC) advised employers on important steps they could take to ensure equal pay for equal work, including eliminating discriminatory pay gaps on the basis of prior salary and the 2005 EEOC Compliance Manual states that [p]rior salary cannot, by itself, justify a compensation disparity.
(e)In July of 2015, the acting director of the federal Office of Personnel Management provided guidance on advancing pay equality in the federal government, warning that reliance on salary history could potentially adversely affect a candidate who is returning to the workplace after having taken extended time off from his or her career or for whom an existing rate of pay is not reflective of the candidates current qualifications or existing labor market conditions.
(f)Courts also have warned against relying on salary history and have stated that prior salary cannot, by itself, justify a wage disparity. In Corning Glass Works v. Brennan, (1974) 417 U.S. 188, the United States Supreme Court held that a pay differential which ar[ises] simply because men would not work at the low rates paid women ... and reflect[s] a job market in which [the employer] could pay women less than men for the same work is not based on a cognizable factor other than sex under the Equal Pay Act (Public Law 88-38) (Id., at p. 205). More recently, in Rizo v. Yovino, Fresno County Superintendent of Schools, United States District Court, Eastern District of California, Case No. 1:14-cv-0423-MJS, the district court denied summary judgment on defendants motion under the federal Equal Pay Act based on its finding that, a pay structure based exclusively on prior wages is so inherently fraught with the risk indeed, here, the virtual certainty that it will perpetuate a discriminatory wage disparity between men and women that it cannot stand, even if motivated by a legitimate non-discriminatory business purpose.(Id., at p. 16). The court went on to explain that,say[ing] an otherwise unjustified pay differential between women and men performing equal work is based on a factor other than sex because it reflects historical market forces which value the equal work of one sex over the other perpetuates the markets sex-based subjective assumptions and stereotyped misconceptions Congress passed the Equal Pay Act to eradicate. (Id., at p. 17).
(g)This act will codify existing law with respect to the provision stating that prior salary cannot, by itself, justify a wage differential under Section 1197.5 of the Labor Code.
(h)This act will also help ensure that both employers and workers are able to negotiate and set salaries based on the requirements, expectations, and qualifications of the person and the job in question, rather than on an individuals prior earnings, which may reflect widespread, longstanding, gender-based wage disparities in the labor market.
SEC. 2.Section 1197.5 of the Labor Code is amended to read:1197.5.(a)An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
(1)The wage differential is based upon one or more of the following factors:
(A)A seniority system.
(B)A merit system.
(C)A system that measures earnings by quantity or quality of production.
(D)A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, business necessity means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2)Each factor relied upon is applied reasonably.
(3)The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
(b)Any employer who violates subdivision (a) is liable to the employee affected in the amount of the wages, and interest thereon, of which the employee is deprived by reason of the violation, and an additional equal amount as liquidated damages.
(c)The Division of Labor Standards Enforcement shall administer and enforce this section. If the division finds that an employer has violated this section, it may supervise the payment of wages and interest found to be due and unpaid to employees under subdivision (a). Acceptance of payment in full made by an employer and approved by the division shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (g).
(d)Every employer shall maintain records of the wages and wage rates, job classifications, and other terms and conditions of employment of the persons employed by the employer. All of the records shall be kept on file for a period of three years.
(e)Any employee may file a complaint with the division that the wages paid are less than the wages to which the employee is entitled under subdivision (a) or that the employer is in violation of subdivision (j). The complaint shall be investigated as provided in subdivision (b) of Section 98.7. The division shall keep confidential the name of any employee who submits to the division a complaint regarding an alleged violation of subdivision (a) or (j) until the division establishes the validity of the complaint, unless the division must abridge confidentiality to investigate the complaint. The name of the complaining employee shall remain confidential if the complaint is withdrawn before the confidentiality is abridged by the division. The division shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to these employees.
(f)The department or division may commence and prosecute, unless otherwise requested by the employee or affected group of employees, a civil action on behalf of the employee and on behalf of a similarly affected group of employees to recover unpaid wages and liquidated damages under subdivision (a), and in addition shall be entitled to recover costs of suit. The consent of any employee to the bringing of any action shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (g) unless the action is dismissed without prejudice by the department or the division, except that the employee may intervene in the suit or may initiate independent action if the suit has not been determined within 180 days from the date of the filing of the complaint.
(g)Any employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of the wages, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorneys fees, notwithstanding any agreement to work for a lesser wage.
(h)A civil action to recover wages under subdivision (a) may be commenced no later than two years after the cause of action occurs, except that a cause of action arising out of a willful violation may be commenced no later than three years after the cause of action occurs.
(i)If an employee recovers amounts due the employee under subdivision (b), and also files a complaint or brings an action under subdivision (d) of Section 206 of Title 29 of the United States Code which results in an additional recovery under federal law for the same violation, the employee shall return to the employer the amounts recovered under subdivision (b), or the amounts recovered under federal law, whichever is less.
(j)(1)An employer shall not discharge, or in any manner discriminate or retaliate against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this section. An employer shall not prohibit an employee from disclosing the employees own wages, discussing the wages of others, inquiring about another employees wages, or aiding or encouraging any other employee to exercise his or her rights under this section. Nothing in this section creates an obligation to disclose wages.
(2)Any employee who has been discharged, discriminated or retaliated against, in the terms and conditions of his or her employment because the employee engaged in any conduct delineated in this section may recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief.
(3)A civil action brought under this subdivision may be commenced no later than one year after the cause of action occurs.
SEC. 2.5.Section 1197.5 of the Labor Code is amended to read:1197.5.(a)An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
(1)The wage differential is based upon one or more of the following factors:
(A)A seniority system.
(B)A merit system.
(C)A system that measures earnings by quantity or quality of production.
(D)A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, business necessity means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2)Each factor relied upon is applied reasonably.
(3)The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
(b)An employer shall not pay any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
(1)The wage differential is based upon one or more of the following factors:
(A)A seniority system.
(B)A merit system.
(C)A system that measures earnings by quantity or quality of production.
(D)A bona fide factor other than race or ethnicity, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a race- or ethnicity-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, business necessity means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2)Each factor relied upon is applied reasonably.
(3)The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
(c)Any employer who violates subdivision (a) or (b) is liable to the employee affected in the amount of the wages, and interest thereon, of which the employee is deprived by reason of the violation, and an additional equal amount as liquidated damages.
(d)The Division of Labor Standards Enforcement shall administer and enforce this section. If the division finds that an employer has violated this section, it may supervise the payment of wages and interest found to be due and unpaid to employees under subdivision (a) or (b). Acceptance of payment in full made by an employer and approved by the division shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (h).
(e)Every employer shall maintain records of the wages and wage rates, job classifications, and other terms and conditions of employment of the persons employed by the employer. All of the records shall be kept on file for a period of three years.
(f)Any employee may file a complaint with the division that the wages paid are less than the wages to which the employee is entitled under subdivision (a) or (b) or that the employer is in violation of subdivision (k). The complaint shall be investigated as provided in subdivision (b) of Section 98.7. The division shall keep confidential the name of any employee who submits to the division a complaint regarding an alleged violation of subdivision (a), (b), or (k) until the division establishes the validity of the complaint, unless the division must abridge confidentiality to investigate the complaint. The name of the complaining employee shall remain confidential if the complaint is withdrawn before the confidentiality is abridged by the division. The division shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to these employees.
(g)The department or division may commence and prosecute, unless otherwise requested by the employee or affected group of employees, a civil action on behalf of the employee and on behalf of a similarly affected group of employees to recover unpaid wages and liquidated damages under subdivision (a) or (b), and in addition shall be entitled to recover costs of suit. The consent of any employee to the bringing of any action shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (h) unless the action is dismissed without prejudice by the department or the division, except that the employee may intervene in the suit or may initiate independent action if the suit has not been determined within 180 days from the date of the filing of the complaint.
(h)An employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of the wages, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorneys fees, notwithstanding any agreement to work for a lesser wage.
(i)A civil action to recover wages under subdivision (a) or (b) may be commenced no later than two years after the cause of action occurs, except that a cause of action arising out of a willful violation may be commenced no later than three years after the cause of action occurs.
(j)If an employee recovers amounts due the employee under subdivision (c), and also files a complaint or brings an action under subdivision (d) of Section 206 of Title 29 of the United States Code which results in an additional recovery under federal law for the same violation, the employee shall return to the employer the amounts recovered under subdivision (c), or the amounts recovered under federal law, whichever is less.
(k)(1)An employer shall not discharge, or in any manner discriminate or retaliate against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this section. An employer shall not prohibit an employee from disclosing the employees own wages, discussing the wages of others, inquiring about another employees wages, or aiding or encouraging any other employee to exercise his or her rights under this section. Nothing in this section creates an obligation to disclose wages.
(2)Any employee who has been discharged, discriminated or retaliated against, in the terms and conditions of his or her employment because the employee engaged in any conduct delineated in this section may recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief.
(3)A civil action brought under this subdivision may be commenced no later than one year after the cause of action occurs.
SEC. 3.Section 2.5 of this bill incorporates amendments to Section 1197.5 of the Labor Code proposed by both this bill and Senate Bill 1063. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2017, (2) each bill amends Section 1197.5 of the Labor Code, and (3) this bill is enacted after Senate Bill 1063, in which case Section 2 of this bill shall not become operative.
SEC. 4.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The Legislature finds and declares all of the following:
(a)Over the past decade, the wage gap has barely budged and wage disparities continue to persist. In 2015, the gender wage gap in California stood at 16 cents on the dollar. For women of color, wage inequality is much worse. African American women in California make just 63 cents and Hispanic women less than 43 cents for every dollar white non-Hispanic men make.
(b)The problematic practices of seeking salary history from job applicants and relying on prior salary to set employees pay rates contribute to the gender wage gap by perpetuating wage inequalities across the occupational spectrum. Women are paid less than men in 99.6 percent of occupations and are more likely to face financial penalties for taking time out of the paid workforce due to childbearing and family caregiving responsibilities.
(c)When employers make salary decisions during the hiring process based on prospective employees prior salaries or require women to disclose their prior salaries during salary negotiations, women often end up at a sharp disadvantage and historical patterns of gender bias and discrimination repeat themselves, causing women to continue earning less than their male counterparts.
(d)Government officials have recognized the discriminatory impact that prior salaries can have on women in the job market. In 2015, on Equal Pay Day, the chair Chair of the Equal Employment Opportunity Commission (EEOC) advised employers on important steps they could take to ensure equal pay for equal work, including eliminating discriminatory pay gaps on the basis of prior salary and the 2005 EEOC Compliance Manual states that [p]rior salary cannot, by itself, justify a compensation disparity.
(e)In July of 2015, the acting director of the federal Office of Personnel Management provided guidance on advancing pay equality in the federal government, warning that reliance on salary history could potentially adversely affect a candidate who is returning to the workplace after having taken extended time off from his or her career or for whom an existing rate of pay is not reflective of the candidates current qualifications or existing labor market conditions.
(f)Courts also have warned against relying on salary history and have stated that prior salary cannot, by itself, justify a wage disparity. In Corning Glass Works v. Brennan, (1974) 417 U.S. 188, the United States Supreme Court held that a pay differential which ar[ises] simply because men would not work at the low rates paid women ... and reflect[s] a job market in which [the employer] could pay women less than men for the same work is not based on a cognizable factor other than sex under the Equal Pay Act (Public Law 88-38) (Id., at p. 205). More recently, in Rizo v. Yovino, Fresno County Superintendent of Schools, United States District Court, Eastern District of California, Case No. 1:14-cv-0423-MJS, the district court denied summary judgment on defendants motion under the federal Equal Pay Act based on its finding that, a pay structure based exclusively on prior wages is so inherently fraught with the risk indeed, here, the virtual certainty that it will perpetuate a discriminatory wage disparity between men and women that it cannot stand, even if motivated by a legitimate non-discriminatory business purpose.(Id., at p. 16). The court went on to explain that,say[ing] an otherwise unjustified pay differential between women and men performing equal work is based on a factor other than sex because it reflects historical market forces which value the equal work of one sex over the other perpetuates the markets sex-based subjective assumptions and stereotyped misconceptions Congress passed the Equal Pay Act to eradicate. (Id., at p. 17).
(g)This act will codify existing law with respect to the provision stating that prior salary cannot, by itself, justify a wage differential under Section 1197.5 of the Labor Code.
(h)This act will also help ensure that both employers and workers are able to negotiate and set salaries based on the requirements, expectations, and qualifications of the person and the job in question, rather than on an individuals prior earnings, which may reflect widespread, longstanding, gender-based wage disparities in the labor market.
SEC. 2.Section 1197.5 of the Labor Code is amended to read:1197.5.(a)An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
(1)The wage differential is based upon one or more of the following factors:
(A)A seniority system.
(B)A merit system.
(C)A system that measures earnings by quantity or quality of production.
(D)A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, business necessity means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2)Each factor relied upon is applied reasonably.
(3)The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
(b)Any employer who violates subdivision (a) is liable to the employee affected in the amount of the wages, and interest thereon, of which the employee is deprived by reason of the violation, and an additional equal amount as liquidated damages.
(c)The Division of Labor Standards Enforcement shall administer and enforce this section. If the division finds that an employer has violated this section, it may supervise the payment of wages and interest found to be due and unpaid to employees under subdivision (a). Acceptance of payment in full made by an employer and approved by the division shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (g).
(d)Every employer shall maintain records of the wages and wage rates, job classifications, and other terms and conditions of employment of the persons employed by the employer. All of the records shall be kept on file for a period of three years.
(e)Any employee may file a complaint with the division that the wages paid are less than the wages to which the employee is entitled under subdivision (a) or that the employer is in violation of subdivision (j). The complaint shall be investigated as provided in subdivision (b) of Section 98.7. The division shall keep confidential the name of any employee who submits to the division a complaint regarding an alleged violation of subdivision (a) or (j) until the division establishes the validity of the complaint, unless the division must abridge confidentiality to investigate the complaint. The name of the complaining employee shall remain confidential if the complaint is withdrawn before the confidentiality is abridged by the division. The division shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to these employees.
(f)The department or division may commence and prosecute, unless otherwise requested by the employee or affected group of employees, a civil action on behalf of the employee and on behalf of a similarly affected group of employees to recover unpaid wages and liquidated damages under subdivision (a), and in addition shall be entitled to recover costs of suit. The consent of any employee to the bringing of any action shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (g) unless the action is dismissed without prejudice by the department or the division, except that the employee may intervene in the suit or may initiate independent action if the suit has not been determined within 180 days from the date of the filing of the complaint.
(g)Any employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of the wages, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorneys fees, notwithstanding any agreement to work for a lesser wage.
(h)A civil action to recover wages under subdivision (a) may be commenced no later than two years after the cause of action occurs, except that a cause of action arising out of a willful violation may be commenced no later than three years after the cause of action occurs.
(i)If an employee recovers amounts due the employee under subdivision (b), and also files a complaint or brings an action under subdivision (d) of Section 206 of Title 29 of the United States Code which results in an additional recovery under federal law for the same violation, the employee shall return to the employer the amounts recovered under subdivision (b), or the amounts recovered under federal law, whichever is less.
(j)(1)An employer shall not discharge, or in any manner discriminate or retaliate against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this section. An employer shall not prohibit an employee from disclosing the employees own wages, discussing the wages of others, inquiring about another employees wages, or aiding or encouraging any other employee to exercise his or her rights under this section. Nothing in this section creates an obligation to disclose wages.
(2)Any employee who has been discharged, discriminated or retaliated against, in the terms and conditions of his or her employment because the employee engaged in any conduct delineated in this section may recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief.
(3)A civil action brought under this subdivision may be commenced no later than one year after the cause of action occurs.
SEC. 2.5.Section 1197.5 of the Labor Code is amended to read:1197.5.(a)An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
(1)The wage differential is based upon one or more of the following factors:
(A)A seniority system.
(B)A merit system.
(C)A system that measures earnings by quantity or quality of production.
(D)A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, business necessity means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2)Each factor relied upon is applied reasonably.
(3)The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
(b)An employer shall not pay any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
(1)The wage differential is based upon one or more of the following factors:
(A)A seniority system.
(B)A merit system.
(C)A system that measures earnings by quantity or quality of production.
(D)A bona fide factor other than race or ethnicity, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a race- or ethnicity-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, business necessity means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2)Each factor relied upon is applied reasonably.
(3)The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
(b)
(c)Any employer who violates subdivision (a) or (b) is liable to the employee affected in the amount of the wages, and interest thereon, of which the employee is deprived by reason of the violation, and an additional equal amount as liquidated damages.
(c)
(d)The Division of Labor Standards Enforcement shall administer and enforce this section. If the division finds that an employer has violated this section, it may supervise the payment of wages and interest found to be due and unpaid to employees under subdivision (a). (a) or (b). Acceptance of payment in full made by an employer and approved by the division shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (g). (h).
(d)
(e)Every employer shall maintain records of the wages and wage rates, job classifications, and other terms and conditions of employment of the persons employed by the employer. All of the records shall be kept on file for a period of three years.
(e)
(f)Any employee may file a complaint with the division that the wages paid are less than the wages to which the employee is entitled under subdivision (a) or (b) or that the employer is in violation of subdivision (j). (k). The complaint shall be investigated as provided in subdivision (b) of Section 98.7. The division shall keep confidential the name of any employee who submits to the division a complaint regarding an alleged violation of subdivision (a) or (j) (a), (b), or (k) until the division establishes the validity of the complaint, unless the division must abridge confidentiality to investigate the complaint. The name of the complaining employee shall remain confidential if the complaint is withdrawn before the confidentiality is abridged by the division. The division shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to these employees.
(f)
(g)The department or division may commence and prosecute, unless otherwise requested by the employee or affected group of employees, a civil action on behalf of the employee and on behalf of a similarly affected group of employees to recover unpaid wages and liquidated damages under subdivision (a), (a) or (b), and in addition shall be entitled to recover costs of suit. The consent of any employee to the bringing of any action shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (g) (h) unless the action is dismissed without prejudice by the department or the division, except that the employee may intervene in the suit or may initiate independent action if the suit has not been determined within 180 days from the date of the filing of the complaint.
(g)Any
(h)An employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of the wages, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorneys fees, notwithstanding any agreement to work for a lesser wage.
(h)
(i)A civil action to recover wages under subdivision (a) or (b) may be commenced no later than two years after the cause of action occurs, except that a cause of action arising out of a willful violation may be commenced no later than three years after the cause of action occurs.
(i)
(j)If an employee recovers amounts due the employee under subdivision (b), (c), and also files a complaint or brings an action under subdivision (d) of Section 206 of Title 29 of the United States Code which results in an additional recovery under federal law for the same violation, the employee shall return to the employer the amounts recovered under subdivision (b), (c), or the amounts recovered under federal law, whichever is less.
(j)
(k)(1)An employer shall not discharge, or in any manner discriminate or retaliate against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this section. An employer shall not prohibit an employee from disclosing the employees own wages, discussing the wages of others, inquiring about another employees wages, or aiding or encouraging any other employee to exercise his or her rights under this section. Nothing in this section creates an obligation to disclose wages.
(2)Any employee who has been discharged, discriminated or retaliated against, in the terms and conditions of his or her employment because the employee engaged in any conduct delineated in this section may recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief.
(3)A civil action brought under this subdivision may be commenced no later than one year after the cause of action occurs.
SEC. 3.Section 2.5 of this bill incorporates amendments to Section 1197.5 of the Labor Code proposed by both this bill and Senate Bill 1063. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2017, (2) each bill amends Section 1197.5 of the Labor Code, and (3) this bill is enacted after Senate Bill 1063, in which case Section 2 of this bill shall not become operative.
SEC. 3.SEC. 4.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The Legislature finds and declares all of the following:
(a)Over the past decade, the wage gap has barely budged and wage disparities continue to persist. In 2015, the gender wage gap in California stood at 16 cents on the dollar. For women of color, wage inequality is much worse. African American women in California make just 63 cents and Hispanic women less than 43 cents for every dollar white non-Hispanic men make.
(b)The problematic practices of seeking salary history from job applicants and relying on prior salary to set employees pay rates contribute to the gender wage gap by perpetuating wage inequalities across the occupational spectrum. Women are paid less than men in 99.6 percent of occupations and are more likely to face financial penalties for taking time out of the paid workforce due to childbearing and family caregiving responsibilities.
(c)When employers make salary decisions during the hiring process based on prospective employees prior salaries or require women to disclose their prior salaries during salary negotiations, women often end up at a sharp disadvantage and historical patterns of gender bias and discrimination repeat themselves, causing women to continue earning less than their male counterparts.
(d)Government officials have recognized the discriminatory impact that prior salaries can have on women in the job market. In 2015, on Equal Pay Day, the chair of the Equal Employment Opportunity Commission (EEOC) advised employers on important steps they could take to ensure equal pay for equal work, including eliminating discriminatory pay gaps on the basis of prior salary and the 2005 EEOC Compliance Manual states that [p]rior salary cannot, by itself, justify a compensation disparity.
(e)In July of 2015, the acting director of the federal Office of Personnel Management provided guidance on advancing pay equality in the federal government, warning that reliance on salary history could potentially adversely affect a candidate who is returning to the workplace after having taken extended time off from his or her career or for whom an existing rate of pay is not reflective of the candidates current qualifications or existing labor market conditions.
(f)Courts also have warned against relying on salary history and have stated that prior salary cannot, by itself, justify a wage disparity. In Corning Glass Works v. Brennan, (1974) 417 U.S. 188, the United States Supreme Court held that a pay differential which ar[ises] simply because men would not work at the low rates paid women ... and reflect[s] a job market in which [the employer] could pay women less than men for the same work is not based on a cognizable factor other than sex under the Equal Pay Act (Public Law 88-38) (Id., at 205). More recently, in Rizo v. Yovino, Fresno County Superintendent of Schools, United States District Court, Eastern District of California, Case No. 1:14-cv-0423-MJS, the district court denied summary judgment on defendants motion under the federal Equal Pay Act based on its finding that, a pay structure based exclusively on prior wages is so inherently fraught with the risk indeed, here, the virtual certainty that it will perpetuate a discriminatory wage disparity between men and women that it cannot stand, even if motivated by a legitimate non-discriminatory business purpose.(Id., at 16). The court went on to explain that,say[ing] an otherwise unjustified pay differential between women and men performing equal work is based on a factor other than sex because it reflects historical market forces which value the equal work of one sex over the other perpetuates the markets sex-based subjective assumptions and stereotyped misconceptions Congress passed the Equal Pay Act to eradicate. (Id., at 17).
(g)This act will codify existing law with respect to the provision stating that prior salary cannot, by itself, justify a wage differential under Section 1197.5 of the Labor Code.
(h)This act will also help ensure that both employers and workers are able to negotiate and set salaries based on the requirements, expectations, and qualifications of the person and the job in question, rather than on an individuals prior earnings, which may reflect widespread, longstanding, gender-based wage disparities in the labor market.
SEC. 2.Section 1197.5 of the Labor Code is amended to read:1197.5.(a)An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
(1)The wage differential is based upon one or more of the following factors:
(A)A seniority system.
(B)A merit system.
(C)A system that measures earnings by quantity or quality of production.
(D)A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, business necessity means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2)Each factor relied upon is applied reasonably.
(3)The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
(b)Any employer who violates subdivision (a) is liable to the employee affected in the amount of the wages, and interest thereon, of which the employee is deprived by reason of the violation, and an additional equal amount as liquidated damages.
(c)The Division of Labor Standards Enforcement shall administer and enforce this section. If the division finds that an employer has violated this section, it may supervise the payment of wages and interest found to be due and unpaid to employees under subdivision (a). Acceptance of payment in full made by an employer and approved by the division shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (g).
(d)Every employer shall maintain records of the wages and wage rates, job classifications, and other terms and conditions of employment of the persons employed by the employer. All of the records shall be kept on file for a period of three years.
(e)Any employee may file a complaint with the division that the wages paid are less than the wages to which the employee is entitled under subdivision (a) or that the employer is in violation of subdivision (j). The complaint shall be investigated as provided in subdivision (b) of Section 98.7. The division shall keep confidential the name of any employee who submits to the division a complaint regarding an alleged violation of subdivision (a) or (j) until the division establishes the validity of the complaint, unless the division must abridge confidentiality to investigate the complaint. The name of the complaining employee shall remain confidential if the complaint is withdrawn before the confidentiality is abridged by the division. The division shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to these employees.
(f)The department or division may commence and prosecute, unless otherwise requested by the employee or affected group of employees, a civil action on behalf of the employee and on behalf of a similarly affected group of employees to recover unpaid wages and liquidated damages under subdivision (a), and in addition shall be entitled to recover costs of suit. The consent of any employee to the bringing of any action shall constitute a waiver on the part of the employee of the employees cause of action under subdivision (g) unless the action is dismissed without prejudice by the department or the division, except that the employee may intervene in the suit or may initiate independent action if the suit has not been determined within 180 days from the date of the filing of the complaint.
(g)Any employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of the wages, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorneys fees, notwithstanding any agreement to work for a lesser wage.
(h)A civil action to recover wages under subdivision (a) may be commenced no later than two years after the cause of action occurs, except that a cause of action arising out of a willful violation may be commenced no later than three years after the cause of action occurs.
(i)If an employee recovers amounts due the employee under subdivision (b), and also files a complaint or brings an action under subdivision (d) of Section 206 of Title 29 of the United States Code which results in an additional recovery under federal law for the same violation, the employee shall return to the employer the amounts recovered under subdivision (b), or the amounts recovered under federal law, whichever is less.
(j)(1)An employer shall not discharge, or in any manner discriminate or retaliate against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this section. An employer shall not prohibit an employee from disclosing the employees own wages, discussing the wages of others, inquiring about another employees wages, or aiding or encouraging any other employee to exercise his or her rights under this section. Nothing in this section creates an obligation to disclose wages.
(2)Any employee who has been discharged, discriminated or retaliated against, in the terms and conditions of his or her employment because the employee engaged in any conduct delineated in this section may recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief.
(3)A civil action brought under this subdivision may be commenced no later than one year after the cause of action occurs.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SECTION 1.Section 432.3 is added to the Labor Code, to read:432.3.(a)An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including, but not limited to, compensation and benefits, about an applicant for employment.
(b)Except as provided in subdivision (e), an employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.
(c)Section 433 does not apply to this section.
(d)This section shall not apply to salary history information disclosable to the public pursuant to federal or state law, including, but not limited to, the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) or the federal Freedom of Information Act (Section 552 of Title 5 of the United States Code).
(e)This section, except for subdivision (b), applies to all state and local government employers, including, but not limited to, the Legislature.
(a)An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including, but not limited to, compensation and benefits, about an applicant for employment.
(b)Except as provided in subdivision (e), an employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.
(c)Section 433 does not apply to this section.
(d)This section shall not apply to salary history information disclosable to the public pursuant to federal or state law, including including, but not limited to, the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) or the federal Freedom of Information Act (Section 552 of Title 5 of the United States Code).
(e)This section, except for subdivision (b), applies to all state and local government employers, including, but not limited to, the Legislature.
(a)An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including, but not limited to, compensation and benefits, about an applicant for employment.
(b)Except as provided in subdivision (e), an employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.
(c)Section 433 does not apply to this section.
(d)This section shall not apply to salary history information disclosable to the public pursuant to federal or state law, including but not limited to, the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) or the federal Freedom of Information Act (Section 552 of Title 5 of the United States Code).
(e)This section, except for subdivision (b), applies to all state and local government employers, including, but not limited to, the Legislature.
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Date
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Status
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|---|---|
| Jun 9, 2016 | Referred to Coms. on L. & I.R. and JUD. |
| Sep 2, 2016 | Enrolled and presented to the Governor at 12 p.m. |
| Aug 29, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 71. Noes 4. Page 6339.). |
| Aug 29, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Aug 24, 2016 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after August 26 pursuant to Assembly Rule 77. |
| Aug 23, 2016 | Read third time. Passed. Ordered to the Assembly. (Ayes 38. Noes 0. Page 5291.). |
| Aug 23, 2016 | Read third time. Passed. Ordered to the Assembly. |
| Aug 22, 2016 | Read second time. Ordered to third reading. |
| Aug 19, 2016 | Read third time and amended. Ordered to second reading. |
| Aug 2, 2016 | Read second time. Ordered to third reading. |
| Aug 1, 2016 | From committee: Be placed on second reading file pursuant to Senate Rule 28.8. |
| Jun 29, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (June 28). Re-referred to Com. on APPR. |
| Jun 22, 2016 | From committee: Do pass and re-refer to Com. on JUD. (Ayes 5. Noes 0.) (June 22). Re-referred to Com. on JUD. |
| Jun 15, 2016 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on L. & I.R. |
| Jan 19, 2016 | Read first time. To print. |
| Jun 6, 2016 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Jun 2, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 47. Noes 29.) |
| Jun 2, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 47. Noes 29. Page 5206.) |
| Jun 2, 2016 | Read third time. Passed. Ordered to the Senate. |
| Jun 1, 2016 | Read second time. Ordered to third reading. |
| May 31, 2016 | Read second time and amended. Ordered returned to second reading. |
| May 27, 2016 | From committee: Amend, and do pass as amended. (Ayes 13. Noes 6.) (May 27). |
| May 4, 2016 | In committee: Set, first hearing. Referred to APPR. suspense file. |
| Apr 21, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 4. Noes 2.) (April 20). Re-referred to Com. on APPR. |
| Apr 4, 2016 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Feb 4, 2016 | Referred to Com. on L. & E. |
| Jan 20, 2016 | From printer. May be heard in committee February 19. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 29, 2016 | AB 1676 CAMPOS Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Aug 23, 2016 | Assembly 3rd Reading AB1676 Campos By Jackson | Senate Floor |
Passed |
|
| Jun 28, 2016 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Judiciary |
Passed |
|
| Jun 22, 2016 | Do pass, but first be re-referred to the Committee on [Judiciary] | Senate Standing Committee on Labor and Industrial Relations |
Passed |
|
| Jun 2, 2016 | AB 1676 CAMPOS Assembly Third Reading | Assembly Floor |
Passed |
|
| May 27, 2016 | Do pass as amended. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 20, 2016 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Labor and Employment |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| 9 to 5 California | ** Support | Aug 23, 2016 |
| Agricultural Council Of California | ** Against | Jun 2, 2016 |
| Alliance Of Californians For Community Empowerment | ** Support | Aug 23, 2016 |
| American Association of University Women | ** Support | Aug 23, 2016 |
| Anti-Defamation League | ** Support | Aug 23, 2016 |
| Associated Builders And Contractors Of California | * Support | Jun 22, 2016 |
| Attorney General Kamala D. Harris | ** Support | Jun 2, 2016 |
| California Asian Pacific Chamber Of Commerce | ** Against | Jun 2, 2016 |
| California Asset Building Coalition | ** Support | Aug 23, 2016 |
| California Association For Health Services At Home | ** Against | Jun 2, 2016 |
| California Association Of Winegrape Growers | ** Against | Jun 2, 2016 |
| California Business Properties Association | ** Against | Jun 2, 2016 |
| California Chamber Of Commerce | ** Against | Jun 2, 2016 |
| California Child Care Resource and Referral Network | ** Support | Aug 23, 2016 |
| California Commission on the Status of Women and Girls | ** Support | Aug 23, 2016 |
| California Domestic Workers Coalition | ** Support | Aug 23, 2016 |
| California Employment Lawyers Association | ** Support | Aug 23, 2016 |
| California Farm Bureau Federation | ** Against | Jun 2, 2016 |
| California Federation Of Teachers | ** Support | Jun 2, 2016 |
| California Hotel and Lodging Association | ** Against | Jun 2, 2016 |
| California Latinas for Reproductive Justice | ** Support | Aug 23, 2016 |
| California League of Food Processors | ** Against | Jun 2, 2016 |
| California Manufacturers And Technology Association | * Support | Jun 22, 2016 |
| California Newspaper Publishers Association | ** Against | Jun 2, 2016 |
| California NOW | ** Support | Aug 23, 2016 |
| California Partnership | ** Support | Aug 23, 2016 |
| California Professional Association Of Specialty Contractors | ** Against | Jun 2, 2016 |
| California Restaurant Association | * Support | Jun 22, 2016 |
| California Retailers Association | ** Against | Jun 2, 2016 |
| California State Association Counties | ** Against | Jun 2, 2016 |
| California Teachers Association | ** Support | Aug 23, 2016 |
| California Travel Association | ** Against | Jun 2, 2016 |
| California Trucking Association | ** Against | Jun 2, 2016 |
| California Women's Law Center | ** Support | Aug 23, 2016 |
| California Work and Family Coalition | ** Support | Aug 23, 2016 |
| Camarillo Chamber of Commerce | ** Against | Jun 2, 2016 |
| Carlsbad Chamber of Commerce | ** Against | Jun 2, 2016 |
| Child Care Law Center | ** Support | Aug 23, 2016 |
| Civil Justice Association Of California | * Support | Jun 22, 2016 |
| Consumer and Federation of California | * Support | Jun 28, 2016 |
| Consumer Federation Of California | * Support | Jun 22, 2016 |
| Courage Campaign | ** Support | Aug 23, 2016 |
| Covina | * Support | Jun 22, 2016 |
| Desert Hot Springs Chamber of Commerce | ** Against | Jun 2, 2016 |
| El Centro Chamber of Commerce & Visitors Bureau | ** Against | Jun 2, 2016 |
| Equal Rights Advocates | ** Support | Aug 23, 2016 |
| Greater Conejo Valley Chamber of Commerce | ** Against | Jun 2, 2016 |
| Greater Fresno Area Chamber of Commerce | ** Against | Jun 2, 2016 |
| Greater Riverside Chambers of Commerce | ** Against | Jun 2, 2016 |
| Greater San Fernando Valley Chamber of Commerce | ** Against | Jun 2, 2016 |
| Lake Tahoe South Shore Chamber of Commerce | ** Against | Jun 2, 2016 |
| League Of California Cities | ** Against | Jun 2, 2016 |
| League of California Cities Latino Caucus | ** Support | Aug 23, 2016 |
| Legal Aid Society Employment Law Center | ** Support | Aug 23, 2016 |
| Legislative Women's Caucus | ** Support | Aug 23, 2016 |
| LIUNA Locals 777 & 792 | ** Support | Jun 2, 2016 |
| Los Angeles, City Of | ** Support | Aug 23, 2016 |
| Motion Picture Association Of America | ** Against | Jun 2, 2016 |
| Mujeres Unidas Y Activas | ** Support | Aug 23, 2016 |
| National Association of Social Workers-California Chapter | ** Support | Aug 23, 2016 |
| National Council of Jewish Women | ** Support | Aug 23, 2016 |
| National Council of Jewish Women California | ** Support | Aug 23, 2016 |
| National Federation Of Independent Business | ** Against | Jun 2, 2016 |
| Norco Area Chamber of Commerce & Visitors Center | ** Against | Jun 2, 2016 |
| North Orange County Chamber | ** Against | Jun 2, 2016 |
| Page J | ** Support | Jun 2, 2016 |
| Page K | ** Support | Jun 2, 2016 |
| Page L | ** Against | Jun 2, 2016 |
| Page M | ** Against | Jun 2, 2016 |
| Page N | ** Against | Jun 2, 2016 |
| Parent Voices | ** Support | Aug 23, 2016 |
| Raising California Together | ** Support | Aug 23, 2016 |
| Rancho Cordova Chamber of Commerce | ** Against | Jun 2, 2016 |
| Redondo Beach Chamber of Commerce & Visitors Bureau | ** Against | Jun 2, 2016 |
| Santa Ana Chamber of Commerce | ** Against | Jun 2, 2016 |
| Santa Barbara Women's Political Committee | ** Support | Aug 23, 2016 |
| Santa Clara County Board of Supervisors | ** Support | Aug 23, 2016 |
| The Association on the California Commission for Women | ** Support | Jun 2, 2016 |
| Voices for Progress | ** Support | Aug 23, 2016 |
| Western Center On Law And Poverty Inc. | ** Support | Aug 23, 2016 |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 1676
Author:(Campos and Gonzalez)
As Amended Ver:August 19, 2016
Majority vote
ASSEMBLY: | 47-29 | (June 2, 2016) | SENATE: | 38-0 | (August 23, 2016) |
Original Committee Reference: L. & E.
SUMMARY: Provides that prior salary cannot, by itself, justify any disparity in compensation.
The Senate amendments:
- Remove all sections related to prohibiting employers from seeking previous salary information of prospective employees, and other provisions.
- Require that prior salary shall not, by itself, justify any disparity in compensation under the bona fide factor exception of employee salary history information, as specified.
- Provide for findings and declarations related to wage discrimination.
- Provides technical changes to address chaptering concerns with SB 1063 (Hall) of the current legislative session.
EXISTING LAW:
- Prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.
- Establishes exceptions to this prohibition where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.
- Makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: The author argues that, because changing jobs is often the best opportunity women have to increase their pay; we need to make sure they are not penalized by prior salaries that may well have been discriminatory. The impact of prior salaries is particularly concerning in certain industries and across racial lines.
Similarly, supporters of this bill argue that, "by creating a less biased structure for negotiating pay during the hiring process, this bill will be a proactive way to help empower women to negotiate a fair salary and hopefully get us closer to achieving pay equity in California."
AB 1017 (Campos) of 2015 was similar but not identical to this bill. AB 1017 was vetoed by Governor Brown. The Governor's veto message stated:
I agree with the sponsors that we must endeavor to ensure that all workers are paid fairly and do not receive a lower wage because of their gender or any other immutable characteristic that has no bearing on how they will perform in their job. This year, I signed SB 358 [(Jackson), Chapter 546, Statutes of 2015] that gives California the strongest equal pay law in the nation. This bill, however, broadly prohibits employers from obtaining relevant information with little evidence that this would assure more equitable wages. Let's give SB 358 a chance to work before making further changes. 0004757
Analysis Prepared by: Taylor Jackson / L. & E. / (916) 319-2091 FN: 0004757
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 1676
:
SENATE LABOR & IND. REL. COMMITTEE: 5-0, 6/22/16
AYES: Mendoza, Stone, Jackson, Leno, Mitchell
SENATE JUDICIARY COMMITTEE: 7-0, 6/28/16
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 47-29, 6/2/16 - See last page for vote
SOURCE: American Association of University Women
California Employment Lawyers Association
California NOW
Equal Rights Advocates
DIGEST: This bill clarifies that prior salary, by itself, cannot be used to justify any disparity in compensation between men and women.
Senate Floor Amendments of 8/19/16 double joint the provisions of AB 1676 to
SB 1063 (Hall).
Existing law:
- Bars an employer from requiring an employee to refrain from disclosing the amount of his or her wages, requiring an employee to sign a waiver or other document that denies the employee the right to disclose the amount of his or her wages or discharge, or formally disciplining, or otherwise discriminating against an employee who discloses the amount of his or her wages. (Labor Code §232)
- Prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. (Labor Code §1197.5)
- Establishes exceptions to this prohibition where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex. (Labor Code §1197.5)
- Makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex, or who reduces the wages of any employee in order to comply with wage protections for an employee of the opposite sex. (Labor Code §1199.5)
This bill:
- Clarifies that prior salary, by itself, must not justify any disparity in compensation between workers of the opposite sex.
- Makes findings and declarations on the wage differential between men and women, recent case law, and that this bill is a codification of existing law.
- Contains double-jointing language with SB 1063 (Hall).
Comments
Need for this bill? The author states the following:
On average, California women who are employed full time lose a total of approximately $37.7 billion every year due to the wage gap. These lost wages mean families have less money to spend on goods and services that help drive economic growth… [M]others are the primary or sole breadwinners in nearly 40 percent of families, and married mothers are the primary or co-breadwinners in nearly two-thirds of families. That means women’s wages are key to their families’ ability to make ends meet and get ahead.
The pay gap begins early in women’s careers. According to a study by the American Association of University Women, women one year out of college, working full time, were paid on average just 82 percent of what their male counterparts make. This number shows that there is still a significant wage gap when accounting for age, education and family responsibilities.
According to a recent report from the Institute for Women’s Policy Research, the gender wage gap in the United States will not close until 2058 if progress continues at its current rate. But perhaps our slow rate of progress is due at least in part because we have allowed employers to preserve historical inequities.
Because changing jobs is often the best opportunity women have to increase their pay, we need to make sure they are not penalized by prior salaries that may well have been discriminatory. The impact of prior salaries is particularly concerning in certain industries and across racial lines. For example, women in Silicon Valley with advanced degrees are making more than 70 percent less than men with the same degrees. And California has one of the largest wage gaps for African American and Hispanic women, who make just 64 and 44 cents, respectively, for every $1 a white man makes. These depressed salaries only serve to devalue a woman’s worth and make it harder for her to negotiate better pay.
AB 1676 addresses the pay gap by making findings and declarations and clearly stating that prior compensation cannot be used to justify any disparity in compensation.
Prior Legislation
SB 358 (Jackson, Chapter 546, Statutes of 2015) requires that men and women doing substantially similar work under similar working conditions be paid equally, unless the employer can demonstrate that the pay differential is based on certain enumerated factors.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
American Association of University Women (co-source)
California Employment Lawyers Association (co-source)
California NOW (co-source)
Equal Rights Advocates (co-source)
9 to 5 California
Alliance of Californians for Community Empowerment
Anti-Defamation League
California Asset Building Coalition
California Child Care Resource and Referral Network
California Commission on the Status of Women and Girls
California Domestic Workers Coalition
California Latinas for Reproductive Justice
California Partnership
California Teachers Association
California Women’s Law Center
California Work and Family Coalition
Child Care Law Center
City of Los Angeles
Courage Campaign
League of California Cities Latino Caucus
Legal Aid Society Employment Law Center
Legislative Women’s Caucus
Mujeres Unidas y Activas
National Association of Social Workers-California Chapter
National Council of Jewish Women
National Council of Jewish Women California
Parent Voices
Raising California Together
Santa Barbara Women’s Political Committee
Santa Clara County Board of Supervisors
The Center for Popular Democracy
The Opportunity Institute
The Women’s Foundation of California
Tradeswomen, Inc.
Voices for Progress
Western Center on Law and Poverty
Women’s Foundation of California
OPPOSITION: (Verified 8/22/16)
None received
ARGUMENTS IN SUPPORT: Proponents argue AB 1676 is an important measure to continue previous legislative efforts to bridge the wage gap between male and female workers. Specifically, proponents note that, last year, the Legislature passed SB 358, which requires that men and women doing substantially similar work under similar working conditions be paid equally, barring certain factors. The practice of paying someone solely based on their prior salary was not specifically addressed, recent administrative court decisions have made clear this is discriminatory and locks in a low level of pay for many women. AB 1676 addresses this by making explicit and clear that paying someone less on the basis of a prior salary is discriminatory.
ASSEMBLY FLOOR: 47-29, 6/2/16
AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dodd, Eggman, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Roger Hernández, Holden, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, Nazarian, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon
NOES: Achadjian, Travis Allen, Baker, Brough, Chang, Chávez, Dahle, Beth Gaines, Gallagher, Gray, Grove, Hadley, Harper, Irwin, Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk
NO VOTE RECORDED: Bigelow, Daly, Frazier, O'Donnell
8/22/16 22:58:09
**** END ****
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 1676
:
SENATE LABOR & IND. REL. COMMITTEE: 5-0, 6/22/16
AYES: Mendoza, Stone, Jackson, Leno, Mitchell
SENATE JUDICIARY COMMITTEE: 7-0, 6/28/16
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 47-29, 6/2/16 - See last page for vote
SOURCE: American Association of University Women
California Employment Lawyers Association
California NOW
Equal Rights Advocates
DIGEST: This bill clarifies that prior salary cannot be used to justify any disparity in compensation between men and women.
Existing law:
- Bars an employer from requiring an employee to refrain from disclosing the amount of his or her wages, requiring an employee to sign a waiver or other document that denies the employee the right to disclose the amount of his or her wages or discharge, or formally disciplining, or otherwise discriminating against an employee who discloses the amount of his or her wages. (Labor Code §232)
- Prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. (Labor Code §1197.5)
- Establishes exceptions to this prohibition where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex. (Labor Code §1197.5)
- Makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex, or who reduces the wages of any employee in order to comply with wage protections for an employee of the opposite sex. (Labor Code §1199.5)
This bill:
- Clarifies that prior salary, by itself, must not justify any disparity in compensation between workers of the opposite sex;
- Makes findings and declarations on the wage differential between men and women, recent case law, and that this bill is a codification of existing law.
Comments
Need for this bill? The author states the following:
On average, California women who are employed full time lose a total of approximately $37.7 billion every year due to the wage gap. These lost wages mean families have less money to spend on goods and services that help drive economic growth… [M]others are the primary or sole breadwinners in nearly 40 percent of families, and married mothers are the primary or co-breadwinners in nearly two-thirds of families. That means women’s wages are key to their families’ ability to make ends meet and get ahead.
The pay gap begins early in women’s careers. According to a study by the American Association of University Women, women one year out of college, working full time, were paid on average just 82 percent of what their male counterparts make. This number shows that there is still a significant wage gap when accounting for age, education and family responsibilities.
According to a recent report from the Institute for Women’s Policy Research, the gender wage gap in the United States will not close until 2058 if progress continues at its current rate. But perhaps our slow rate of progress is due at least in part because we have allowed employers to preserve historical inequities.
Because changing jobs is often the best opportunity women have to increase their pay, we need to make sure they are not penalized by prior salaries that may well have been discriminatory. The impact of prior salaries is particularly concerning in certain industries and across racial lines. For example, women in Silicon Valley with advanced degrees are making more than 70 percent less than men with the same degrees. And California has one of the largest wage gaps for African American and Hispanic women, who make just 64 and 44 cents, respectively, for every $1 a white man makes. These depressed salaries only serve to devalue a woman’s worth and make it harder for her to negotiate better pay.
AB 1676 addresses the pay gap by making findings and declarations and clearly stating that prior compensation cannot be used to justify any disparity in compensation.
Prior Legislation
SB 358 (Jackson, Chapter 546, Statutes of 2015) requires that men and women doing substantially similar work under similar working conditions be paid equally, unless the employer can demonstrate that the pay differential is based on certain enumerated factors.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
American Association of University Women (co-source)
California Employment Lawyers Association (co-source)
California NOW (co-source)
Equal Rights Advocates (co-source)
9 to 5 California
Alliance of Californians for Community Empowerment
California Asset Building Coalition
California Child Care Resource and Referral Network
California Domestic Workers Coalition
California Latinas for Reproductive Justice
California Partnership
California Women’s Law Center
California Work and Family Coalition
Child Care Law Center
City of Los Angeles
Courage Campaign
Legal Aid Society Employment Law Center
Legislative Women’s Caucus
Mujeres Unidas y Activas
National Association of Social Workers-California Chapter
National Council of Jewish Women
National Council of Jewish Women California
Parent Voices
Raising California Together
Santa Barbara Women’s Political Committee
Santa Clara County Board of Supervisors
The Center for Popular Democracy
The Opportunity Institute
The Women’s Foundation of California
Tradeswomen, Inc.
Voices for Progress
Western Center on Law and Poverty
None received
ARGUMENTS IN SUPPORT: Proponents argue AB 1676 is an important measure to continue previous legislative efforts to bridge the wage gap between male and female workers. Specifically, proponents note that, last year, the Legislature passed SB 358, which requires that men and women doing substantially similar work under similar working conditions be paid equally, barring certain factors. The practice of paying someone solely based on their prior salary was not specifically addressed, recent administrative court decisions have made clear this is discriminatory and locks in a low level of pay for many women. AB 1676 addresses this by making explicit and clear that paying someone less on the basis of a prior salary is discriminatory.
ASSEMBLY FLOOR: 47-29, 6/2/16
AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dodd, Eggman, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Roger Hernández, Holden, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, Nazarian, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon
NOES: Achadjian, Travis Allen, Baker, Brough, Chang, Chávez, Dahle, Beth Gaines, Gallagher, Gray, Grove, Hadley, Harper, Irwin, Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk
NO VOTE RECORDED: Bigelow, Daly, Frazier, O'Donnell
8/3/16 19:20:46
**** END ****
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
Bill No: AB 1676 (Author:Campos and Gonzalez)
Version: June 15, 2016
Hearing Date: June 28, 2016
Fiscal: Yes
Urgency: No
Consultant: NR
SUBJECT
Employers: wage discrimination
DESCRIPTION
Existing law provides that an employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, as specified. This bill would additionally provide that prior salary cannot, by itself, justify any disparity in compensation.
BACKGROUND
The California Equal Pay Act (Act) was first established in 1949 and requires that men and women in the same workplace be given equal pay for equal work. Although the Act requires gender-neutral pay practices, studies show that women are still paid less than their male counterparts, resulting in what is referred to as the “gender wage gap.” The term “gender wage gap” refers to the difference in earnings between male and female workers.
Each year, the United States Census Bureau and the United States Bureau of Labor Statistics provide an estimate of the wage gap using annual earnings based on the Current Population Survey Annual Social and Economic Supplement data. Although the gender wage gap has narrowed since the 1960s, after the passage of the federal Equal Pay Act of 1963 (EPA), female workers nationwide earned 78 percent of what male workers were paid as of 2013. (DeNavas-Walt, Carmen, and Proctor, Income, Poverty, and Health Insurance Coverage in the United States: 2013 (2014) U.S. Census Bureau, Current Population Reports (Sept. 2014) <http://www.census.gov/content/ dam/Census/library/publications/2014/demo/p60-249.pdf> [as of Apr. 23, 2014) p. 10.) This translates into a wage gap of 22 cents. In 2014, the gender wage gap in California stood at 16 cents on the dollar. (AAUW, The Gender Pay Gap: California (Sept. 2014) <http://www.aauw.org/files/ 2014/09/California-Pay-Gap-2014.pdf> [as of June 21, 2016].)
Recent federal legislation has been attempted to eliminate the national gender wage gap. The Pay Check Fairness Act (H.R. 377/S. 844, 113th Congress) would have increased penalties for employers who pay different wages to men and women for “equal work” and would add programs for training, research, technical assistance, and pay equity employer recognition awards. Those bills, among other things, would have provided safeguards to protect employees from retaliation for making inquiries or disclosures concerning employee wages. Those bills would also have established more restrictive standards by requiring an employer to establish that a factor used by the employer to pay an employee more than an employee of the opposite sex was job related, consistent with business necessity, and not derived from a sex-based differential in compensation, and that the employer’s purpose could not be accomplished by less discriminatory alternative means.
The Fair Pay Act (H.R. 438/S. 168, 113th Congress) would have expanded the scope of the EPA to include racial and ethnic minority protection and narrowed the “factors other than sex” upon which an employer could rely to justify a wage differential. Those bills would also have substituted “equivalent jobs” for an “equal” work standard. Equivalent jobs are those whose composite of skill, effort, responsibility, and working conditions are equivalent in value (or worth to the employer), even if the jobs are dissimilar. Those prior federal efforts failed to move out of their respective houses. The Fair Pay Act was reintroduced last year as H.R. 1787 (Norton, 114th Congress) and remains in its first committee.
That being said, there has been more movement on the state front. A new California law, SB 358 (Jackson, Ch. 546, Stats. 2015) was signed by the governor last year. SB 358 requires that men and women doing substantially similar work under similar working conditions be paid equally, unless the employer can demonstrate that the pay differential is based on certain enumerated factors. This bill would further clarify that prior salary shall not, by itself, justify any disparity in compensation.
This bill passed out of the Senate Labor & Industrial Relations Committee on June 22, 2016 with a vote of 5-0.
CHANGES TO EXISTING LAW
Existing law bars an employer from requiring an employee to refrain from disclosing the amount of his or her wages, requiring an employee to sign a waiver or other document that denies the employee the right to disclose the amount of his or her wages or discharge, or formally disciplining, or otherwise discriminating against an employee who discloses the amount of his or her wages. (Lab. Code Sec. 232.)
Existing law prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. (Lab. Code Sec. 1197.5.)
Existing law establishes exceptions to this prohibition where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex. (Lab. Code Sec. 1197.5.)
Existing law makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex, or who reduces the wages of any employee in order to comply with wage protections for an employee of the opposite sex. (Lab. Code Sec. 1199.5.)
This bill would clarify that prior salary, by itself, must not justify any disparity in compensation between workers of the opposite sex.
This bill would make findings and declarations on the wage differential between men and women, recent case law, and that this bill is a codification of existing law.
COMMENT
- Stated need for the bill
According to the author:
According to a recent report from the Institute for Women’s Policy Research, the gender wage gap in the United States will not close until 2058 if progress continues at its current rate. But perhaps our slow rate of progress is due at least in part because we have allowed employers to preserve historical inequities.
Because changing jobs is often the best opportunity women have to increase their pay, we need to make sure they are not penalized by prior salaries that may well have been discriminatory. The impact of prior salaries is particularly concerning in certain industries and across racial lines. For example, women in Silicon Valley with advanced degrees are making more than 70 percent less than men with the same degrees. And California has one of the largest wage gaps for African American and Hispanic women, who make just 64 and 44 cents, respectively, for every $1 a white man makes. These depressed salaries only serve to devalue a woman’s worth and make it harder for her to negotiate better pay.
The Women’s Foundation of California supports this measure and states, “By creating a less biased structure for negotiating pay during the hiring process, AB 1676 will be a proactive way to help empower women to negotiate a fair salary and hopefully get us closer to achieving pay equity in California.”
- Using prior salary history to determine pay disproportionality effects women
As provided in this bill’s legislative findings and declarations, “Over the past decade, the wage gap has barely budged and wage disparities continue to persist. In 2015, the gender wage gap in California stood at 16 cents on the dollar. For women of color, wage inequality is much worse. African American women in California make just 63 cents and Hispanic women less than 43 cents for every dollar white non-Hispanic men make. […] When employers make salary decisions during the hiring process based on prospective employees’ prior salaries or require women to disclose their prior salaries during salary negotiations, women often end up at a sharp disadvantage and historical patterns of gender bias and discrimination repeat themselves, causing women to continue earning less than their male counterparts.”
The California Federation of Teachers supports this measure and states, “Recently, government officials have started to recognize the discriminatory impact that prior salaries can have on women in the job market. This past year, the Chair of the Equal Employment Opportunity Commission advised employers on how to ensure equal pay for equal work, including eliminating ‘discriminatory pay gaps on the basis of prior salary.’ Basing an employee’s compensation off of their previous salary puts women at a disadvantage because their salary is then just compounded with any past biases or negotiation disadvantages. It becomes a cycle that follows women for the entirety of their career. The value of each position should be based on its duties, and the skill, education, and experience of an applicant, not on a person’s sex. Research has shown that wage transparency raises wages and reduces disparity. AB 1676 (Campos) will move us closer to achieving pay equity in California.”
A large coalition of stakeholders were opposed to a prior version of this bill that would have prohibited an employer from seeking salary history information, and would have required an employer, except state and local government employers to provide the pay scale for a position to an applicant for employment. The author subsequently amended the bill to clarify that prior salary, by itself, must not justify any disparity in compensation between workers of the opposite sex. With those amendments, all opposition was removed.
- Bill may allow employers to consider salary history in combination with other factors to justify a wage differential
This bill would prohibit an employer from using an employee’s prior salary history to, by itself, justify a gender wage differential. The operative statute, however, allows an employer to consider a bona fide factor, such as education, training, or experience to justify salary. A strict reading of the statute would limit an employer to using only one bona fide factor to justify a gender wage differential. Another reasonable interpretation of the statute would allow an employer to use multiple bona fide factors (e.g., education and experience) to justify paying an employee of the opposite sex less. The language of this bill, as applied to the former interpretation, would prohibit any consideration of salary history. However, if multiple bona fide factors may be used, this bill would allow an employer to justify a gender wage differential based, at least in part, on salary history so long as another factor was used as well.
Support: Alliance of Californians for Community Empowerment; American Association of University Women; California Asset Building Coalition; California Child Care Resource and Referral Network; California Domestic Workers Coalition; California Latinas for Reproductive Justice; California Partnership; California Women’s Law Center; California Work and Family Coalition; Child Care Law Center; Courage Campaign; Equal Rights Advocates; Legal Aid Society Employment Law Center; Mujeres Unidas y Activas; National Association of Social Workers-California Chapter; National Council of Jewish Women; Parent Voices; Raising California Together; Santa Barbara Women’s Political Committee; Santa Clara County Board of Supervisors; The Center for Popular Democracy; The Opportunity Institute; The Women’s Foundation of California; Tradeswomen, Inc.; Voices for Progress; Western Center on Law and Poverty; 9 to 5 California
Opposition: None Known
HISTORY
Source: California Employment Lawyers Association
Related Pending Legislation: None Known
Prior Legislation:
SB 358 (Jackson, Ch. 546, Stats. 2015) See Background.
AB 1017 (Campos, 2015) was substantially similar to the introduced version of this bill. AB 1017 was vetoed by Governor Brown who stated that the bill would broadly prohibit employers from obtaining relevant information with little evidence that the prohibition would assure more equitable wages.
AB 1354 (Dodd, 2015) would enact the Equal Pay for Equal Work Act of 2015 and require an employer with 100 or more employees, prior to becoming a contractor or subcontractor with the state, to submit an income equality program to the Department of Fair Employment and Housing for approval and certification and require the income equality program to include the collection of summary data on the compensation paid to employees, including data sorted by gender and race, and policies designed to ensure income equality and prevent unlawful discrimination. AB 1354 is currently in the Assembly Appropriations Committee.
ACR 50 (Gonzalez, 2015) would proclaim April 14, 2015, as Equal Pay Day in recognition of the need to eliminate the gender gap in earnings by women and to promote policies to ensure equal pay for all. ACR 50 is currently on the Senate Floor.
AB 2555 (Oropeza, 2006) would have revised the California Equal Pay Act to authorize an award of civil penalties to be paid to the Labor and Workforce Development Agency and would have required specified employers to provide annual statements to employees setting forth job title, wage rate, and how the wages were calculated. AB 2555 would have required the creation of the Equal Pay Commission to study and report wage disparities between men and women and between minorities and nonminorities. Governor Schwarzenegger vetoed this bill because he believed that, although the historical trend of women earning less than men for doing the same work must be stopped, the provisions of the bill would not help achieve this goal.
AB 169 (Oropeza, 2005) would have authorized an award of EPA violation civil penalties with 75 percent of the penalties going to the DLSE and 25 percent going to the employee. Governor Schwarzenegger vetoed and noted that current state and federal laws forbid paying an individual lower wages on account of gender and provide stiff civil and criminal penalties against employers that do so. He argued that the bill’s elimination of judicial discretion to modify the penalty coupled with the massive increases in fines would do nothing more than increase frivolous litigation and could lead to the same shakedown lawsuits that the citizens of California voted to curb when they passed Proposition 64 in 2004.
AB 2317 (Oropeza, 2004) would have increased liquidated damages payable by an employer to an employee for violating the California EPA, from an amount equal to the pay differential to treble that amount. AB 2317 would have further increased the liquidated damages to five times the amount of the pay differential, if it is determined that the employer willfully violated this provision. Governor Schwarzenegger vetoed the bill because he did not believe it was necessary in order to achieve pay equity
Prior Vote:
Senate Labor & Industrial Relations Committee (Ayes 5, Noes 0)
Assembly Floor (Ayes 47, Noes 29)
Assembly Appropriations Committee (Ayes 13, Noes 6)
Assembly Labor and Employment Committee (Ayes 4, Noes 2)
**************
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Tony Mendoza, Chair
2015 - 2016 Regular
Bill No: AB 1676 Hearing Date: June 22, 2016
Author: | Campos | ||
Version: | June 15, 2016 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Gideon L. Baum | ||
Subject: Employers: salary information
KEY ISSUE
Should the Legislature clarify that prior salary cannot be used to justify any disparity in compensation between men and women?
ANALYSIS
Existing law:
- Bars an employer from requiring an employee to refrain from disclosing the amount of his or her wages, requiring an employee to sign a waiver or other document that denies the employee the right to disclose the amount of his or her wages or discharge, or formally disciplining, or otherwise discriminating against an employee who discloses the amount of his or her wages. (Labor Code §232)
- Prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. (Labor Code §1197.5)
- Establishes exceptions to this prohibition where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex. (Labor Code §1197.5)
- Makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex, or who reduces the wages of any employee in order to comply with wage protections for an employee of the opposite sex. (Labor Code §1199.5)
This bill:
- Clarifies that prior salary, by itself, must not justify any disparity in compensation between workers of the opposite sex;
- Makes findings and declarations on the wage differential between men and women, recent case law, and that this bill is a codification of existing law.
COMMENTS
1. Need for this bill?
The author states the following:
“On average, California women who are employed full time lose a total of approximately $37.7 billion every year due to the wage gap. These lost wages mean families have less money to spend on goods and services that help drive economic growth… [M]others are the primary or sole breadwinners in nearly 40 percent of families, and married mothers are the primary or co-breadwinners in nearly two-thirds of families. That means women’s wages are key to their families’ ability to make ends meet and get ahead.
The pay gap begins early in women’s careers. According to a study by the American Association of University Women, women one year out of college, working full time, were paid on average just 82 percent of what their male counterparts make. This number shows that there is still a significant wage gap when accounting for age, education and family responsibilities.
According to a recent report from the Institute for Women’s Policy Research, the gender wage gap in the United States will not close until 2058 if progress continues at its current rate. But perhaps our slow rate of progress is due at least in part because we have allowed employers to preserve historical inequities.
Because changing jobs is often the best opportunity women have to increase their pay, we need to make sure they are not penalized by prior salaries that may well have been discriminatory. The impact of prior salaries is particularly concerning in certain industries and across racial lines. For example, women in Silicon Valley with advanced degrees are making more than 70 percent less than men with the same degrees. And California has one of the largest wage gaps for African American and Hispanic women, who make just 64 and 44 cents, respectively, for every $1 a white man makes. These depressed salaries only serve to devalue a woman’s worth and make it harder for her to negotiate better pay.”
AB 1676 addresses the pay gap by making findings and declarations and clearly stating that prior compensation cannot be used to justify any disparity in compensation.
2. Proponent Arguments:
Proponents argue AB 1676 is an important measure to continue previous legislative efforts to bridge the wage gap between male and female workers. Specifically, proponents note that, last year, the Legislature passed SB 358, which requires that men and women doing substantially similar work under similar working conditions be paid equally, barring certain factors. The practice of paying someone solely based on their prior salary was not specifically addressed, recent administrative court decisions have made clear this is discriminatory and locks in a low level of pay for many women. AB 1676 addresses this by making explicit and clear that paying someone less on the basis of a prior salary is discriminatory.
3. Opponent Arguments:
None on file.
4. Double Referral:
This bill has been double-referred and, if approved by this committee, it will be sent to the Senate Judiciary Committee for a hearing.
5. Prior Legislation:
SB 358 (Jackson), Chapter 546, Statutes of 2015, requires that men and women doing substantially similar work under similar working conditions be paid equally, unless the employer can demonstrate that the pay differential is based on certain enumerated factors.
SUPPORT
California Employment Lawyers Association (Sponsor)
Alliance of Californians for Community Empowerment
American Association of University Women
California Asset Building Coalition
California Child Care Resource and Referral Network
California Domestic Workers Coalition
California Employment Lawyers Association
California Latinas for Reproductive Justice
California Partnership
California Women’s Law Center
California Work and Family Coalition
Child Care Law Center
Courage Campaign
Equal Rights Advocates
Legal Aid Society Employment Law Center
Mujeres Unidas y Activas
National Association of Social Workers-California Chapter
National Council of Jewish Women
Parent Voices
Raising California Together
Santa Barbara Women’s Political Committee
Santa Clara County board of Supervisors
The Center for Popular Democracy
The Opportunity Institute
The Women’s Foundation of California
Tradeswomen, Inc.
Voices for Progress
Western Center on Law and Poverty
9 to 5 California
OPPOSITION
None received.
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:
Author:(Campos and Gonzalez)
As Amended Ver:May 31, 2016
Majority vote
Committee | Votes | Ayes | Noes |
Labor | 4-2 | Roger Hernández, Chu, McCarty, Thurmond | Patterson, Linder |
Appropriations | 13-6 | Gonzalez, Bloom, Bonilla, Bonta, Calderon, Eggman, Eduardo Garcia, Roger Hernández, Holden, Quirk, Santiago, Weber, Wood | Bigelow, Chang, Gallagher, Jones, Obernolte, Wagner |
SUMMARY: Prohibits the use of employee salary history information, as specified, and enacts other requirements. Specifically, this bill:
- Prohibits an employer, including state and local government employers, from seeking salary history information, including compensation and benefits, about an applicant for employment either personally or through an agent.
- Requires an employer, except state and local government employers, upon reasonable request, to provide the pay scale for a position to an applicant for employment.
- Provides that a violation of this bill's provisions would not be subject to the misdemeanor provision.
EXISTING LAW:
- Prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.
- Establishes exceptions to this prohibition where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.
- Makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions.
FISCAL EFFECT: According to the Assembly Appropriations Committee, ongoing administrative costs, in the range of $100,000 to $400,000 (Labor Enforcement and Compliance Fund), for the Division of Labor Standards Enforcement (DLSE) to enforce provisions of this bill. Costs will depend on the number of claims filed with DLSE to investigate complaints.
COMMENTS: The author argues that, because changing jobs is often the best opportunity women have to increase their pay, we need to make sure they are not penalized by prior salaries that may well have been discriminatory. The impact of prior salaries is particularly concerning in certain industries and across racial lines.
By removing past salary history from the hiring determination and requiring employers to be more transparent, this bill will help ensure that employers will not be able to use a history of low pay as justification for continuing to underpay women. According to the author, it's time we put an end to this prejudicial hiring practice and give women a better chance to negotiate a fair deal.
Similarly, supporters of this bill argue that, "by creating a less biased structure for negotiating pay during the hiring process, this bill will be a proactive way to help empower women to negotiate a fair salary and hopefully get us closer to achieving pay equity in California."
A coalition of employers, including the California Chamber of Commerce, opposes this measure. They state that basing compensation solely on an applicant's prior salary is already a questionable business practice. Opponents also argue that Labor Code Section 1197.5 requires an employer to provide equal pay for substantially similar work, which Senator Jackson strengthened last year through SB 358 (Jackson), Chapter 546, Statutes of 2015, which was signed into law. Senator Jackson, numerous media outlets and various articles have referenced SB 358 as the "toughest equal pay law in the nation." SB 358 went into effect on January 1, 2016. Adequate time has not been given to assess how implementation of SB 358 is faring. Opponents also argue that this bill will be subject to increased litigation because a simple inquiry into an applicant's salary history or prior compensation when there is no ultimate harm to the applicant/employee would create an opportunity for litigation.
AB 1017 (Campos) from 2015 was substantially similar to this bill. AB 1017 was vetoed by Governor Brown.
Analysis Prepared by: Taylor Jackson / L. & E. / (916) 319-2091 FN: 0003091
Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ABPCA Bill Id:AB 1676
Author:(Campos) – As Introduced Ver:January 19, 2016
Policy Committee: | Labor and Employment | Vote: | 4 - 2 |
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill prohibits an employer, including state and local government employers, from seeking salary history information, including compensation and benefits, about an applicant for employment either personally or through an agent. Specifically, this bill:
- Requires an employer, except state and local government employers, upon reasonable request, to provide the pay scale for a position to an applicant for employment.
- Provides that a violation of this bill’s provisions would not be subject to the misdemeanor provision.
FISCAL EFFECT:
Ongoing administrative costs, in the range of $100,000 to $400,000 (Labor Enforcement and Compliance Fund), for the Division of Labor Standards Enforcement (DLSE) to enforce provisions of this bill. Costs will depend on the number of claims filed with DLSE to investigate complaints.
COMMENTS:
- Background. According to research by Linda Babcock, an economist at Carnegie Mellon University, 51.5% of men and 12.5% of women asked for more money when receiving job offers. She also found that when women asked (for more money), they asked for 30 percent less than men requested.
Her research and that of others also has found that women are penalized for negotiating, while men are rewarded for the same behavior. (As the actress Jennifer Lawrence wrote in Lenny after the Sony hacking revealed that she was paid less than her male co-stars, she didn’t fight for more because “I didn’t want to seem ‘difficult’ or ‘spoiled.’ ”)
Because starting salaries determine raises and future salaries, women who do not bargain lose as much as $750,000 for middle-income jobs and $2 million for high-income jobs over their careers, Ms. Babcock found. One solution, Ms. Babcock said, is to coach women to negotiate. Another is to change corporate practices so the people who set compensation are aware of the disparity and are advocates for women during negotiations.
- Purpose. This bill is supported by the Women’s Foundation of California who state, “By creating a less biased structure for negotiating pay during the hiring process, AB 1676 will be a proactive way to help empower women to negotiate a fair salary and hopefully get us closer to achieving pay equity in California.”
- Opposition. The Chamber of Commerce opposes this bill. They state there are several legitimate, non-discriminatory reasons why employers seek information regarding prior compensation of an applicant. The employer may not have accurate wage information on what the current market is for potential job positions. By requesting salary information, employers can adjust any unrealistic expectations or salary ranges to match the current market rate for the job. According to the Chamber, this has worked to the benefit of the applicant/employee. The opposition also notes that California just passed SB 358, deemed by many to be the "toughest equal pay law in the nation." They encourage more time to allow SB 358 to take effect before making additional changes.
- Prior legislation. This bill is substantially similar to AB 1017 of 2015, except that the requirement to provide pay scale information does not apply to the Legislature. Governor Brown vetoed AB 1017 and issued the following message:
"I agree with the sponsors that we must endeavor to ensure that all workers are paid fairly and do not receive a lower wage because of their gender or any other immutable characteristic that has no bearing on how they will perform in their job. This year, I signed SB 358 that gives California the strongest equal pay law in the nation. This bill, however, broadly prohibits employers from obtaining relevant information with little evidence that this would assure more equitable wages. Let's give SB 358 a chance to work before making further changes."
SB 358 (Jackson) Chapter 546, Statutes of 2015, enhances the California Equal Pay Act by, among other things, clarifying the relative burdens of proof and prohibiting retaliation against employees for disclosing or discussing their wages with co-workers.
Analysis Prepared by: Misty Feusahrens / APPR. / (916) 319-2081
Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hernández, Chair
ABPCA Bill Id:AB 1676 (
Author:Campos) – As Introduced Ver:January 19, 2016
SUBJECT: Employers: salary information
SUMMARY: Prohibits the use of employee salary history information, as specified, and enacts other requirements. Specifically, this bill:
- Prohibits an employer, including state and local government employers, from seeking salary history information, including compensation and benefits, about an applicant for employment either personally or through an agent.
- Requires an employer, except state and local government employers, upon reasonable request, to provide the pay scale for a position to an applicant for employment.
- Provides that a violation of this bill’s provisions would not be subject to the misdemeanor provision.
EXISTING LAW:
- Prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.
- Establishes exceptions to this prohibition where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.
- Makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions.
FISCAL EFFECT: Unknown
COMMENTS: The author argues that, it has been 50 years since the enactment of the Equal Pay Act, seven years since President Obama signed the Lilly Ledbetter Fair Pay Act and women continue making substantially less than men. Women earn 78 cents for every dollar their white male counterparts make. California has one of the largest wage gaps for African American and Hispanic women, who make just 64 and 44 cents, respectively, for every $1 a white man makes. These depressed salaries only serve to devalue a woman’s worth and make it harder for her to negotiate better pay.
Because changing jobs is often the best opportunity women have to increase their pay, we need to make sure they are not penalized by prior salaries that may well have been discriminatory. The impact of prior salaries is particularly concerning in certain industries and across racial lines. For example, women in Silicon Valley with advanced degrees are making more than 70 percent less than men with the same degrees. On average, California women who are employed full time lose a total of approximately $37.7 billion every year due to the wage gap. In 2011, the Georgetown University Center on Education and the Workforce found that college-educated women working full time earn $650,000 less than their male peers do over the course of a lifetime. Women who are surgeons earn 71 percent of what men earn, while food preparers earn 87 percent, according to data from Claudia Goldin, a Harvard economist.
The pay gap begins early in women’s careers. According to a study by the American Association of University Women, women one year out of college, working full time, were paid on average just 82 percent of what their male counterparts make. This number shows that there is still a significant wage gap when accounting for age, education and family responsibilities.
These lost wages mean families have less money to spend on goods and services that help drive economic growth. In California today, mothers are the primary or sole breadwinners in nearly 40 percent of families, and married mothers are the primary or co-breadwinners in nearly two-thirds of families. That means women’s wages are key to their families’ ability to make ends meet and get ahead.
According to a recent report from the Institute for Women’s Policy Research, the gender wage gap in the United States will not close until 2058 if progress continues at its current rate. But perhaps our slow rate of progress is due at least in part because we have allowed employers to preserve historical inequities.
By removing past salary history from the hiring determination and requiring employers to be more transparent, AB 1676 will help ensure that employers will not be able to use a history of low pay as justification for continuing to underpay women. According to the author, it’s time we put an end to this prejudicial hiring practice and give women a better chance to negotiate a fair deal.
Argument Regarding Practical Application of Previous Salaries & Salary Negotiations
A New York Times article from January 2016 offers insight into the potential practical applications of using previous salaries as a hiring tool and the gender inequities often found in salary negotiations. [1]
When receiving job offers, 51.5 percent of men and 12.5 percent of women asked for more money, according to a study of Carnegie Mellon University graduate students by Linda Babcock, an economist at the university. In other research, she found that when women asked (for more money), they asked for 30 percent less than men requested.
Her research and that of others also has found that women are penalized for negotiating, while men are rewarded for the same behavior. (As the actress Jennifer Lawrence wrote in Lenny after the Sony hacking revealed that she was paid less than her male co-stars, she didn’t fight for more because “I didn’t want to seem ‘difficult’ or ‘spoiled.’ ”)
Because starting salaries determine raises and future salaries, women who do not bargain lose as much as $750,000 for middle-income jobs and $2 million for high-income jobs over their careers, Ms. Babcock found. One solution, Ms. Babcock said, is to coach women to negotiate. Another is to change corporate practices so the people who set compensation are aware of the disparity and are advocates for women during negotiations.
Arguments in Support
The Women’s Foundation of California supports this measure and states, “By creating a less biased structure for negotiating pay during the hiring process, AB 1676 will be a proactive way to help empower women to negotiate a fair salary and hopefully get us closer to achieving pay equity in California.”
The California Federation of Teachers supports this measure and states, “Recently, government officials have started to recognize the discriminatory impact that prior salaries can have on women in the job market. This past year, the Chair of the Equal Employment Opportunity Commission advised employers on how to ensure equal pay for equal work, including eliminating “discriminatory pay gaps on the basis of prior salary.” Basing an employee’s compensation off of their previous salary puts women at a disadvantage because their salary is then just compounded with any past biases or negotiation disadvantages. It becomes a cycle that follows women for the entirety of their career. The value of each position should be based on its duties, and the skill, education, and experience of an applicant, not on a person’s sex. Research has shown that wage transparency raises wages and reduces disparity. AB 1676 (Campos) will move us closer to achieving pay equity in California.”
Arguments in Opposition
A coalition of employers, including the California Chamber of Commerce, opposes this measure. They state that basing compensation solely on an applicant’s prior salary is already a questionable business practice. See EEOC Compliance Manual, December 5, 2000 (stating,“[p]rior salary cannot, by itself, justify a compensation disparity. This is because prior salaries of job candidates can reflect sex-based compensation discrimination. Thus, permitting prior salary alone as a justification for a compensation disparity "would swallow up the rule and inequality in compensation among genders would be perpetuated." However, they argue that there are several legitimate, non-discriminatory reasons why employers seek information regarding prior compensation of an applicant. Employers do not necessarily have accurate wage information on what the current market is for all potential job positions. Employers in competitive industries often do not advertise salaries, in order to utilize their pay structure as a way in which to lure talented employees from their competition. By requesting salary information, employers can adjust any unrealistic expectations or salary ranges to match the current market rate for the advertised job position.
Opponents also argue that Labor Code Section 1197.5 requires an employer to provide equal pay for substantially similar work, which Senator Jackson strengthened last year through SB 358, which was signed into law. Senator Jackson, numerous media outlets and various articles have referenced SB 358 as the “toughest equal pay law in the nation.” SB 358 went into effect on January 1, 2016. Adequate time has not been given to assess how implementation of SB 358 is faring.
Opponents also argue that this bill will be subject to increased litigation because any violation will be subject to litigation under the Labor Code Private Attorneys General Act (PAGA), Sections 2698, et seq. Under this bill, a simple inquiry into an applicant’s salary history or prior compensation when there is no ultimate harm to the applicant/employee would create an opportunity for litigation.
Finally, opponents state that his bill indicates it applies to all state and local government employees, including the Legislature, however it specifically excludes all salary history information that is required to be publicly disclosed, such as all of the salaries of existing Legislative staff. They state there is simply no justification to impose a prohibition onto private sector employers, but not a public sector employer, such as the Legislature; especially because the government is not immune from the issue of wage disparity.
Previous Related Legislation
AB 1017 (Campos) from 2015 was substantially similar to AB 1676. AB 1017 was vetoed by the Governor. The Governor's veto message stated:
"I agree with the sponsors that we must endeavor to ensure that all workers are paid fairly and do not receive a lower wage because of their gender or any other immutable characteristic that has no bearing on how they will perform in their job. This year, I signed SB 358 that gives California the strongest equal pay law in the nation. This bill, however, broadly prohibits employers from obtaining relevant information with little evidence that this would assure more equitable wages. Let's give SB 358 a chance to work before making further changes."
SB 358 (Jackson) Chapter 546, Statutes of 2015 strengthens the California Equal Pay Act by, among other things, clarifying the relative burdens of proof and prohibiting retaliation against employees for disclosing or discussing their wages with co-workers.
REGISTERED SUPPORT / OPPOSITION:
Support
9 to 5 California
Alliance of Californians for Community Empowerment
American Association of University Women
Attorney General Kamala D. Harris
California Asset Building Coalition
California Child Care Resource and Referral Network
California Domestic Workers Coalition
California Employment Lawyers Association
California Federation of Teachers
California Latinas for Reproductive Justice
California Partnership
California Women's Law Center
California Work and Family Coalition
Child Care Law Center
Courage Campaign
Equal Rights Advocates
Legal Aid Society Employment Law Center
LIUNA Locals 777 & 792
Mujeres Unidas Y Activas
National Council of Jewish Women- California
Parent Voices
Raising California Together
Santa Clara County Board of Supervisors
Santa Clara County Commission on the Status of Women
The Association on the California Commission for Women
The Center for Popular Democracy
The Opportunity Institute
Tradeswomen, Inc.
Voices for Progress
Western Center on Law and Poverty
Women’s Foundation of California
Opposition
Agricultural Council of California
California Asian Pacific Chamber of Commerce
California Association for Health Services at Home
California Association of Winegrape Growers
California Business Properties Association
California Chamber of Commerce
California Farm Bureau Federation
California Hotel and Lodging Association
California League of Food Processors
California Manufacturers and Technology Association
California Newspaper Publishers Association
California Professional Association of Specialty Contractors
California Restaurant Association
California Retailers Association
California State Association Counties
California State Council of the Society of Human Resource Management
California Travel Association
California Trucking Association
Camarillo Chamber of Commerce
Carlsbad Chamber of Commerce
Chambers of Commerce Alliance Ventura and Santa Barbara Counties
Civil Justice Association of California
Desert Hot Springs Chamber of Commerce
El Centro Chamber of Commerce & Visitors Bureau
Greater Conejo Valley Chamber of Commerce
Greater Fresno Area Chamber of Commerce
Greater Riverside Chambers of Commerce
Greater San Fernando Valley Chamber of Commerce
Lake Tahoe South Shore Chamber of Commerce
League of California Cities
Motion Picture Association of America, Inc.
National Federation of Independent Business
Norco Area Chamber of Commerce & Visitors Center
North Orange County Chamber
Rancho Cordova Chamber of Commerce
Redondo Beach Chamber of Commerce & Visitors Bureau
Santa Ana Chamber of Commerce
Santa Maria Valley Chamber of Commerce Visitor & Convention Bureau
South Bay Association of Chambers of Commerce
Southwest California Legislative Council
The Chamber of the Santa Barbara Region
Torrance Area Chamber of Commerce
Western Manufactured Housing Communities Association
Wine Institute
Analysis Prepared by: Taylor Jackson / L. & E. / (916) 319-2091
The New York Times, How to Bridge that Stubborn Pay Gap, by Claire Cain Miller, January 15, 2016. http://www.nytimes.com/2016/01/17/upshot/how-to-bridge-that-stubborn-pay-gap.html?_r=0 ↑
