Assembly Standing Committee on Labor and Employment

Good afternoon. Welcome to the SOE Labor and Employment Committee hearing. In order to facilitate the goal of the hearing as much as from the public, within the limits of our time, we will not permit conduct that disrupts, disturbs or otherwise impedes the orderly conduct of legislative proceedings.

Commenters who impede the orderly conduct of this meeting but may be ruled out of order and may be removed. Reminder for our witnesses. For each Bill we will take two main witness in support and two main witnesses in opposition. Each primary witness will get up to two minutes each for additional public comment.

We ask that you state your name, affiliation and position on the Bill. We will be starting as a Subcommitee as we wait for other Members of our Committee to arrive. Oh, closer. Okay. I see a Senator here. Would you like to begin? Yes, ma' am. Senator Richardson.

Thank you.

So we're going to go a little out of order. This is item number 11, SB703.

This is. The last shall be first and the first shall be last. Well, first of all, thank you, Madam Chair, Members of the Committee and all the staff that that's worked diligently in considering our Bill here. SB 703.

SB 703 represents a critical step in ensuring that our state's trucking industry operates in a fair legal and transparent manner. The misclassification of workers as independent contractors is a long standing issue in the trucking industry, particularly at our port.

Studies have shown that while 82% of port truck drivers are labeled as independent contractors, more than 80% of them are actually misclassified as employees. This misclassification strips workers of essential protections, forces them to shoulder operational costs unfairly, and creates an uneven playing field where compliant companies are undercut by those that skirt labor laws.

The Legislature has established important accountability measures over the years. However, enforcement remains to be the challenge and and that needs critical lack of data that has hindered that enforcement. Courts currently collect some information on trucking companies assessing their facilities. There we go.

But they do not collect the specific data needed to determine whether a trucking company relies on employees, drivers or misclassified independent contractors. This gap in data collection leaves both our workers and responsible businesses vulnerable.

And it also hinders the ability of cargo owners, including many that we see along the way of their ability to ensure that their products arrive safely and appropriately.

SB703 addresses this problem by requiring the ports to collect and report key information that will enable the regulators to identify non-compliant actors and to hold them accountable while ensuring that businesses are playing by the rules and are not unfairly disadvantaged. Misclassification does not just harm workers, it also has its broader economic and environmental consequences.

I've been working closely with those who have concerns with this Bill. Individuals may come today, and we are still willing to work with anyone who has concerns or amendments they'd like us to consider should the Bill advance, which I hope that it does today.

I remain fully committed to continuing to work collaboratively with all stakeholders as the Bill moves forward through the process. Here with me today to speak on the importance of SB703 is the sponsor, Shane Guzman, on behalf of the California Teamsters Public Affairs Council, and Elmer Lazardi with the California Labor Federation.

Good afternoon. Shane Guzman, on behalf of the Teamsters, proud to sponsor this Bill. We'd like to thank the author for her work on this and the Committee and the Committee staff for their excellent analysis of the Bill.

We wanted to move this legislation this year because we have done a number sponsored a number of bills to deal with this issue over the years. Misclassification in the ports. It is some of the worst sort of exploitation of workers that you would find in the country in our largest ports in California.

And as the Senator stated, there are really, really good laws on the books, including joint liability with cargo owners, et cetera, that go to the heart of what's going on with these drivers, unfortunately, because in the largest ports, there's thousands of trucks that enter every day in and out of those ports.

And it's difficult to tell just by looking at a truck who's cheating and not cheating. So you need that data to be able to determine who's following the law and who should be prosecuted for their misconduct. And when I say misconduct, it's fraud.

It's fraud on the worker, it's fraud on the state because they're not paying taxes, and it's unfair competition against the trucking companies who are doing the right thing. So we, as was stated, we have been working with the opponents of the Bill. I think many of them will remove their opposition. It's our hope in the next Committee.

We will continue to work diligently with anybody who has concerns, but we desperately need this information so that we can get efficient force enforcement of our important labor laws. Please vote.

Thank you. Good afternoon, Chair, Members. Elmer Lizardi here on behalf of the California Federation of Labor Unions. Again, we are proud to support SB703 to protect workers from endemic misclassification in the trucking industry. Worker classific worker misclassification burdens drivers by leaving them without a safety net, exempting them from workplace safety protections. Workers workers compensation Paid sick days.

Thank you. Overtime and reimbursement for equipment and gas. Trucking companies force misclassified drivers to shoulder company business costs and to lease and maintain their big rig trucks, an obligation that is nearly impossible for many low wage workers and low wage drivers to afford.

This often leaves the driver so indebted to their boss that they end up owing more in truck and operating costs at the end of the week than they have earned in wages despite working full time.

As mentioned by the author and Shane, misclassification also creates unfair competition for the businesses that follow the law and cheats the state as companies use these practices to evade taxes and deprive the State of much needed revenue.

California has taken significant steps to end misclassification, but employers are getting more and more sophisticated in finding ways to avoid compliance with the layers of subcontracting and other tactics by ensuring that the ports in LA and Long Beach are collecting this specific information on trucking companies entering their facilities and California can help stop this misclassification in the trucking industry and ensure that drivers are adequately protected and compensated for their hard work.

Thank you so much and we respectfully ask for an aye vote.

Thank you. Before I call the opposition, I just want to take this opportunity to set a quorum here and get us going. Secretary, can you please call the roll?

Roll Call

Thank you. I apologize for that interruption. I would like to actually, before we call up opposition, are there additional witnesses in support?

Madam Chair, Members Dan Cha, on behalf of the Port of Long Beach, we have no position on the Bill, but we, we've had been having productive conversations with the sponsors and the author and we look forward to continuing those conversations as the Bill progresses.

I don't see Port of Long Beach, Port of LA's lobbyist, so I will chime in on behalf of them as well. Thank you so much.

Thank you. Seeing no other witnesses in support, I will now call up the main witnesses in opposition. Seeing none, are you.

Madam Chair and Members Chris Shimoda. On behalf of the California Trucking Association, we are listed as opposed at the current moment, but with the most recent amendments, we do intend to remove opposition in the next Committee. So just want to thank the author and sponsor for working with us. Thank you.

Okay. Additional.

Okay. California Retailers Association. Sarah Polomo. Echo Chris's comments too. Thank you. Sounds good.

I was wondering what you guys were looking at is that A new television in my hearing room. Okay, we'll bring it back to the Members for any questions.

Okay. We have a motion and a second would like to thank the author for bringing this Bill forward. You have an aye reco from me. Would you like to close?

Second.

Just want to respectfully ask for your aye vote and thank you for your consideration today.

Secretary, please call the roll.

Roll Call

And that Bill is out. 5-0. Thank you. Thank you. Have a good day.

I'm sorry, I forgot to speak the motion on SB 703. It was do pass and be re referred to the Committee on Transportation.

Madam Chair, can I move the consent calendar?

Yes, you may. Okay, thank you. We have a motion and a second on the consent calendar. Secretary, please call the roll. Secretary, please read the consent calendar.

File item 3, SB 275 by Senator Smallwood-Cuevas. The motion is do pass and be re referred to the Committee on Appropriations with recommendation to consent. Calendar file item 6, SB648 by Senator Smallwood-Cuevas. The motion is do pass and be re referred to Committee on Judiciary with recommendation to consent calendar File item number eight, SB355 by Senator Perez.

The motion is do pass and be re referred to the Committee on Judiciary with recommendation to consent calendar and File item number 10 SB693 by Senator Cortese. The motions do pass and be re referred to the Committee on Appropriations with recommendation to consent.

The motion was made by Assembly Member Ward, second by Member Kalra.

[Roll Call]

Consent calendar is out. I will now give the gavel to Assemblymember Kalra while I present Assemblymember. I'm sorry. Senator Reyes's AB294.

We have Chair Ortega presenting SB295 on behalf of Senator Reyes. Whenever you're ready.

As chair of the Committee, I would like to present SB294, the Workplace Know Your Rights Act, on behalf of Senator Reyes. On behalf of the author, I would first like to note she is working with stakeholders on amendments to narrow the provision of the Bill related to providing notice to workers about rights related workers compensation.

This was a commitment made in the Senate Judiciary Committee and moved the opposition coalition to neutral. The Bill will protect families by ensuring a worker's emergency contact is notified should they be arrested or detained by the state or federal law. Enforcement.

President Trump's upending of existing protections creates uncertainty for workers and employers in the workplace as they are unsure which laws apply in which context, employers are unsure about what laws to follow and workers feel that they must remain silent, which makes them further susceptible to to civil and labor law violations.

SB 294 will ask the Labor Commissioner's Office to create a template for employers to annually inform their employees about their rights. Now more than ever, it is imperative that we protect workers rights and create certainty for employers so that everyone knows their rights under California and federal law.

The Bill is being sponsored by the California Labor Federation, SEIU California, the Central American Resource center and is a Latino Caucus priority. Here to testify and support is Elmer Lizarde with the California Federation of Labor and Jamil Hunt with SEIU Local usw.

Thank you, thank you. Good afternoon. Elmer Lizardi here with the California Federation of Labor Unions. We are proud to co sponsor SB294, which will educate workers and employers of labor and civil rights under state and federal law to promote adequate, just and equal enforcement.

California workers unions and advocates have fought tirelessly to ensure the strongest worker protection laws in the country. However, the federal Administration has enacted a wave of Executive orders that weaken civil and labor protections, making it difficult for workers to understand their rights.

In addition, the Federal Administration has started mass layoffs of federal workers and gutting of federal agencies tasked with enforcing federal labor and civil rights laws, such as the Department of Labor, the Equal Employment Opportunities Commission, the National Labor Relations Board, and most recently the National Institute for Occupational Safety and Health.

Apart from dealing with these significant impacts, our state agencies chronic understaffing makes health and safety law enforcement incredibly difficult. Given the enforcement challenges at both the state and federal level, a worker's understanding of labor law is critical so that they can speak up or report when there are violations in their workplace.

One of the best ways to prevent violations is to empower workers to protect themselves whenever possible. Not only does this help reduce the burden on our understaffed agencies, but it helps protect workers by preventing harms altogether.

In addition, the Federal Administration's policies are targeting the most vulnerable workers and confusion over state and federal laws scares workers into remaining silent. Ultimately, when workers are not aware of their fundamental labor and constitutional rights, it is much more likely that those rights will be violated.

This Bill is a powerful educational tool to help workers understand the rights and secure them in the workplace and feel empowered to enforce them if necessary. Thank you and we respectfully ask for an aye vote.

Thank you.

Afternoon Chair Members. My name is Jameel Hunt. I have been working security for 11 years and serve as a shop steward in my workplace. I'm here in support of SB294 because I've seen firsthand what happens when workers aren't told their rights.

Recently, while dealing with an OSHA posting by my employer, I noticed that they had omitted a second page to the report. That page explained to employees their protections for reporting safety hazards. By excluding this page, employees were actively being deprived of information that would encourage them to reach out.

This is just an example of the ways companies make it harder for employees to know their rights. Without this knowledge being readily available, workers can't protect themselves or or hold the proper party accountable when something does go wrong.

SB 294 would change that for requiring the Labor Commission to create a simple, clear template outlining workers rights under state and federal law. Employees would have to. Employers would have to give this notice to workers every year so no one is left in the dark.

This is especially important now with the rising threats from wage theft and unsafe conditions to immigration enforcement in the workplace. Many are scared to speak up and more don't know how. This Bill gives them the information they need to stand up for themselves and help employers stay compliant.

When everyone knows the rules, we have a safer, fairer workplace. That's why I respectfully ask for you to say aye on SB294. Thank you.

Thank you. Is there anyone else here in support of SB294?

Scott Brent with the Smart Transportation Division in support, thank you.

Jessica Stender on behalf of Equal Rights Advocates, in support.

Thank you.

Ivan Fernandez on behalf of the UAW in support.

Thank you.

Good afternoon, Bryant Miramontes, the American Federation of State County Municipal Employees in support.

Thank you.

Navnit Puryear on behalf of the California School Employees Association, in support

Thank you.

Tiffany Mok on behalf of CFT in strong support. Thank you.

Jp Hanna, on behalf of California Nurses Association in support.

Joy Hunt, Member of SEIU USWW and I'm in support.

Mariko Yoshihara on behalf of the California Employment Lawyers Association, in support.

Kristin Heidelbach on behalf of UFCW Western States Council, in support.

Shane Gusman on behalf of the Teamsters in support.

Thank you.

Coby Pizzotti on behalf of the California Association of Psychiatric Technicians. Thank you.

Thank you. Is there anyone here in opposition to SB294?

Marlon Lara, on behalf of the California Restaurant Association, in opposition. Thank you.

Thank you. All right, we'll bring it back to the Committee. Any questions, comments, motions? We have a motion and a second. Madam Chair, on behalf of the Senator, would you like to close?

I respectfully ask for an aye vote.

Thank you, Madam Secretary. You take a roll call vote, please on SB294.

[Roll Call]

The Bill is out. Thank you. Thank you.

So we will wait on our couple of Senators who should be on their way shortly.

Welcome, Senator McNerney. Before you get comfortable, would you like to come? Yes, whenever you are ready.

Thank you. Well, good afternoon and Chair Ortega and Members of the Committee. I'm here today to present SB7 again. SB7 is something that will put common sense guardrails into how some of these high tech tools are applied. It will require employers to notify applicants and workers before using automated decision making systems or ADSs in employment decisions.

It ensures that there's a human being in the loop for discipline and termination decisions. It bars ADSs from predicting workers future behaviors that justify employment actions. That's a big one. We've made amendments to address some of the concerns. We've taken vendors who distribute software out of the bill.

So in other words, if you're producing an ADS system, this bill will not impact you. It only focuses on employers who use this technology. We narrowed the scope of the bill so the IT applies only to discipline or termination decisions. These changes will make the bill more focused and workable while keeping strong protections in place.

Again, this is a common sense bill. Who wants to have algorithms deciding about your future today? Testifying in support is Ivan Fernandez from the California Federation of Labor Unions and Shane Guzman from the Teamsters. Thank you.

Good afternoon, Madam Chair and Members of the Committee. Ivan Fernandez with the California Federation of Labor Unions, proud co sponsor of SB7, want to say thank you to the Committee for the Amendments brought forth. We very much appreciate them.

Automated decision making systems or ADS may be a tool employers may be a new tool that employers have at their disposal to squeeze out every bit of productivity from a worker. However, this practice is nothing new. Employers have used scientific management to speed up, monitor and control workers for decades.

Today, employers are outsourcing management to artificial intelligence powered systems capable of firing and disciplining a worker and determining even how much a worker is paid. For example, Amazon Warehouses use an unpaid time system that provides workers with a limited amount of minutes of non working time throughout the day.

However, rather than actually providing any flexibility, workers have reported that that this system is used to automatically generate paperwork to fire them if they use up a certain amount of allotted time.

Workers can be fired even if they're 10 minutes late because of a sick child, a traffic jam or a number of issues or circumstances that an ADS is unable to discern. Another risk of unsupervised ADS usage is the potential for bias and discrimination being built into these systems.

Technology is not free of biases and the flaws of humans that create them. Human biases are typically visible and can be tracked and corrected given that they are made at the human scale. However, human biases can be built into the core of these systems and they are hard to analyze or hard to discern.

This risk is worst when these tools are used to predict future behavior rather than analyzing past performances. Just because, or just being flagged as a risk can impact a worker's ability to get good shift raises or put them at risk of termination simply because of an algorithm.

SB7 requires human oversight of machine management with a few simple requirements as mentioned by the Senator. And with that I respectfully urge your aye vote at the appropriate time.

Good afternoon, Madam Chair, Members of the Committee, Shane Gusman on behalf of the Teamsters, the Amalgamated Transit Union, the Machinists Utility Workers Union of America, UNITE here and the engineers and scientists of California, all in strong support of this bill.

As the previous witness stated, the growth and use of these kinds of management tools is exponential and the technology is cheaper for companies to use and that's why they're using it. And unfortunately there are a lot of negatives when you take out the human element to management decisions.

These decisions are for a lot of workers, life altering decisions. Getting terminated from their job could mean the difference between, you know, keeping their housing, keeping their children in schools, paying for health care. So having a human involved, having transparency is incredibly important. There's nothing inherently wrong with that.

In fact, it's very desirable because one the the technology is not infallible, it can make mistakes. But also having human involvement brings a sense of humanity to the workplace and a sense of dignity for the workers that has all too frequently become missing in the workplace.

So for those reasons we strongly support this bill and urge your aye vote.

Thank you. Do we have additional comments and support?

Hello. Elmer Lazardi on behalf of UAW Region 6 in support.

Tiffany Mock on behalf of CFT in support. Thank you.

Jessica Stenner on behalf of Equal Rights Advocates in support.

Mariko Yoshihar on behalf of the California Employment Lawyers Association and Tech Equity Action in support.

Hello, Brian Mayor Montez with the American Federation of State County Municipal Employees in support.

Good afternoon. Kristen Heidelbach here on behalf of UFCW Western States Council in support.

Scott Brent, Smart Transportation Division in support.

Navneet Puryear on behalf of the California School Employees Association in support.

Griselda Chavez with the Mesa Verde Group on behalf of the Consumer Federation of California in support.

JP Hannah on behalf of the California Nurses Association in support.

Ariana Montes on behalf of the Communication Workers of America District 9 in support. Thank You.

Thank you. See no other witnesses in support. Do we have any witnesses? Main witnesses in opposition?

Morning, Madam Chair, or afternoon? Sorry, I was thinking about Senate labor earlier. Sorry. Chris McKayley here on behalf of the Society for Human Resource Management in respectful opposition. We genuinely appreciate the engagement of the author and do acknowledge a number of changes. Just to rifle through a few of our remaining concerns.

First, we think that independent contractors who are by definition not under our direction and control should be removed from the measure. We're also concerned about the definition of ads. And employment related decisions is really still a very broad language. We think that the notices under this Bill will be voluminous to say the least.

For example, if ADS is used in simple allocation of tasks or scheduling, et cetera, we're going to see a massive amount of those. There is some information that's required under the bill, for example, that a business has to know individuals, vendors or entities that created the ads.

We think that particularly small businesses are not going to be aware of that sort of information. And I would note that our remaining concern is that this Bill is applicable across the board, regardless of size of the employer, regardless of industry or anything else, and represents a very substantial burden on the smaller businesses in particular.

Thank you, Madam Chair.

Thank you. Good afternoon. Ashley Hoffman, on behalf of the California Chamber of Commerce, I just want to start by thanking the author and staff and sponsors for a lot of the meetings we've had on this bill.

I know we met recently and I know the ball is in my court to provide, you know, red line based on the most recent amendments. We are planning to do that as soon as possible.

You know, as mentioned as some of the concerns by my colleague, I think, as we've said from the start, completely agree with the concept that there should be a human in the loop. Right? An employee should not be being terminated solely based on the output of a computer system. We have no issue whatsoever.

I think some of our concerns were more, you know, some of what the ADS is used for and what does that mean as far as something like a discipline decision. So, for example, the bill says that we could not rely primarily on ADS for discipline decision.

Sometimes an ADS will ping that an incident has happened or someone's not wearing the correct PPE or something of that nature because no one else is in the vicinity to maybe observe that instance. And so there may be scenarios then where we are needing to primarily rely on an ads, technically speaking, to make some of those determinations.

Also, some concerns, I think, with the appeals provision, I think we'd rather Focus more on again ensuring that there is a human in a loop and review rather than simply allowing for an appeal, especially where it applies anytime an ADS is used at all, regardless of how much it influenced the decision and a few other provisions.

So again, just respect for the author and staff and appreciate the conversation. So thank you.

Thank you. Do we have additional witnesses? In opposition.

Good afternoon. Eric Will, on behalf of Rural County Representatives of California and California Special District Association. Need more coffee. In respectful opposition. Thank you.

Good afternoon. Emily Doe with the California Credit Union League in respectful opposition.

Sarah Polomo, California Retailers Association. Opposed.

Matt Easley, Associated General Contractors of California in opposition.

Good afternoon. Kaylin Dean, California Hospital Association. In opposition.

Chair and Members, Max Perry on behalf of the San Diego Regional Chamber of Commerce in opposition. Thank you.

Robert Singleton, Chamber of Progress, also respectfully opposed.

Good afternoon. Emma Jungwirth on behalf of the California State Association of Counties in respectful opposition. Thank you.

Good afternoon. Sarah Bridges for California Manufacturers and Technology Association. Respectfully opposed. Thank you.

Margaret Gladstein on behalf of the Security Industry Association in opposition.

Thank you. See no other witnesses. In opposition. I will now turn it over to the dais. Any questions from Members? Seeing none.

Do we have a motion second close?

Yes. Thank you for. It's okay. Would you like to close, Senator?

Yeah. Thank you for hearing the bill and I thank the witnesses on both sides. There's been a robust discussion on this issue and there may still be room for improvement. A couple of points, I think Mr. McKayley mentioned ADU's definition as too broad. But the bill does not apply to assignments.

So if an ADU makes a work assignment, then that's not covered in the bill. But if an ADU disciplines someone, then that is covered. So that would be a subject to appeal. And I think it's necessary to have.

When a decision is made regarding somebody's future or whether it's discipline or firing, then there needs to be an appeal to a human being that is meaningful. And I think that's basically the function that we're trying to get at. If one of the witnesses wants to add to that. And with that I'll ask for an aye vote.

[Roll call]

That Bill is out 5-0. Thank you. Senator Smallwood Cuevas, would you like to, whenever you're ready. Present SB238 and SB464.

Okay. And we also have SB442.

Yes. Okay. Correct.

Great. I will start SB238. Thank you so much, Madam Chair and Assembly Members. Good to be with you. I am proud to. Thank you. I am proud to present SB238 a meaningful step toward promoting transparency. Transparency, accountability and fairness in the artificial intelligence monitoring systems across California.

This Bill ensures individuals are clearly informed when and how AI systems are used to monitor them, giving people the right to know when algorithms influence decisions about job performance, hiring and access to services. According to the Urban Institute, nearly 7 in 10 U.S.

Workers are subject to electronic monitoring, yet most have no idea what's being tracked or how that data is being used. Surveillance is no longer limited to cameras. Today's companies are using wearable technologies like sensor equipped ID badges that collect data on location, voice tone, body temperature, and even bathroom frequency.

These systems are expanding in ways that disproportionately impact communities of color, low income workers and students. Without oversight, AI tools risk embedding bias, undermining privacy and enabling digital discrimination.

And because AI systems are only as fair as the data that they're trained on, SB238 requires institutions to disclose AI usage and evaluate its impact to help prevent racial, gender and socioeconomic bias. Workers deserve protection from opaque algorithmic systems that can lead to unfair surveillance, disciplinary action, or inaccurate evaluations with no opportunity to respond.

Crucially, SB238 does not limit an employer's ability to monitor for theft, to monitor for misconduct, or to address safety in terms of ensuring that the monitoring is transparent and that workers aren't kept in the dark. That is the sole purpose of SB238. At its core, this Bill is about fairness and dignity.

It's about how we're integrating technology into our workplace. It's about respecting the privacy of human beings. It's about ensuring that as we are reshaping the future of California and our workplace places, that we're doing it by putting people, and not the machines and the algorithms first. With me today to testify is Ivan from the California Labor Federation.

Good afternoon, Madam Chair and Members of the Committee. Ivan Fernandez with the California Federation of Labor Unions in proud support of SB238, a Bill that will increase workplace transparency. As many of the Members on this Committee know, surveillance technology has expanded beyond the scope of just cameras and microphones.

As noted by the Senator today, employers have access to seemingly military grade equipment such as wearable trackers, heat sensors, retina trackers, and a variety of other pieces of technology that are not just bound to cameras or microphones. Surveillance hardware and software are extremely affordable and increasingly available.

This is why employers are now eager to monitor every corner of the work site and is why they've required workers to install a variety of monitors such as keystroke monitors, a very effective form of productivity management and a practice that DOGE has instituted at the federal level.

With every inch of the workplace under the eye of the employer, workers simply do not have adequate awareness of what tools are used in the workplace. Awareness and transparency are vital for a safe and productive workplace.

SB238 will foster that said transparency in the workplace, and because of these reasons, I respectfully urge your aye vote at the appropriate time. Thank you.

Thank you. Do we have additional witnesses in support.

Jessica Stender on behalf of Equal Rights Advocates in support.

Mariko Yoshihara behalf of the California Employment Lawyers Association and Tech Equity Action in support.

Coby Pizzotti on behalf of the California Association of Psychiatric Technicians in support.

Shane Gusman on behalf of the Teamsters in support.

Griselda Chavez with the Mesa Verde Group on behalf of the Consumers Federation of California in support.

Seeing no additional witnesses in support do we have witnesses in opposition? Whenever you're ready.

Thank you. Good afternoon Chair and Members Emily Dell with the California Credit Union League here in respectful opposition to SB238 credit unions, as not for profit member owned financial cooperatives, are committed to protecting the privacy of their member owners. Unfortunately, our financial institutions operate under a constant threat of criminal activity and cyber attacks.

First and foremost, we're concerned about the breadth of notice requirements in the Bill about the use of internal security and monitoring practices being made publicly available.

This could expose details about internal security systems, including what surveillance tools are being used, the name of the model and description of the tool's capabilities, and the exact individuals, vendors and entities that are going to manage and have access to that personal information gathered.

This type of public disclosure would essentially provide a roadmap for bad actors to potentially defraud the organization and exploit any vulnerabilities by gaining information on how to hack those systems.

Also, we believe the definition of workplace surveillance tool in the Bill encompasses standard and basic components of security systems used in financial institutions like security cameras, and we would have to disclose every aspect of information gathering systems used for things like internal workplace security fraud prevention investigations, workplace safety compliance, tracking, and even more.

Data security is of the utmost importance to financial institution and my members. Public disclosure of these security measures implemented to protect sensitive consumer data and information increases risk and vulnerability around data security heightens reputational risk and could erode member trust in their credit unions. So for these reasons, we must respectfully oppose the Bill. Thank you.

Good afternoon. Ashley Hoffman, on behalf of the California Chamber of Commerce, I want to echo the comments from my colleague.

I know some of my Members, not only in the financial institution sector, but other sectors, do have similar concerns about having information publicly available about the exact names of the models that they are using and descriptions of those technological capabilities.

The Bill does apply both to public and private sector, of which there are more than 1.7 million private sector businesses alone.

And also have some concerns I think about, you know, at a time when DIR has limited resource, the need to kind of siphon through, therefore probably millions of pieces of paper and that could continually change as well. So have some concerns about not only the disclosure, but also what this means for ODR and its resources. So thank you.

Thank you. Do we have additional witnesses? In opposition.

Madam Chair, Chris McKayle, on behalf of the Los Angeles Area Chamber of Commerce in a respectful opposition. Thank you.

Afternoon. Sarah Pollo Moo with the California Retailers Association opposed.

Good afternoon. Eric Lehr on behalf of the California State Association of Counties, the Urban Counties of California and the League of California Cities. Respectful opposition. Thank you.

Good afternoon. Kaylin Dean, California Hospital Association, in respectful opposition.

Good afternoon. Dorothy Johnson on behalf of the Association Of California School Administrators and also the California Special Districts Association. Thank you.

Eric Will, on behalf of Rural County Representatives of California in respectful opposition.

Good afternoon. Sabrina Lockhart from the California Attractions and Parks Association in opposition.

Matt Easley on behalf of Associated General Contractors of California, in opposition. Thank you.

Margaret Gladstein, on behalf of the Security Industry Association opposition.

Seeing no other comments in opposition. I will now turn it back to the dais for questions from members. Seeing none. Is there a motion? Member, would you like to close?

Thank you very much, Madam Chair. And I want to just be clear that, you know, we are working with the concerns from the opposition, but this Bill really requires just a general description.

It does not reveal source codes or passwords, technical architecture, operational workflow that would in any way compromise cybersecurity and any of the proprietary concerns that that have been raised.

You know, this is really about ensuring that as we integrate technology, we're doing so with full disclosure to the workers in terms of how they're being monitored and what is being used to monitor them. Again, respecting the privacy of workers and also really ensuring the safety of the workers place. And with that, I respectfully ask for your aye vote.

Thank you, Secretary. Please call the roll

[Roll Call]

That Bill is out 5-0. Thank you.

Whenever you're ready. This is item number four, SB 442.

Thank you, Madam Chair. Again, I'm pleased to present SB 442, which establishes basic staffing standards for self-checkout. Across the state, self-checkout kiosks have become commonplace in many of our grocery and retail stores.

And too often, these kiosks are used to replace customer-facing staff, leaving employee to manage customers, manage and monitor theft, and respond to disruptions, all at the same time. Automation in our stores has increased and the opportunities with it have made it very challenging for the shopping experience for many customers throughout the state.

SB 442 sets minimum requirements to improve safety and ensure a better shopping experience for everyone. This Bill requires at least one staffed checkout lane to remain open to customers when self-checkout is in use. It ensures that at least one employee is dedicated solely to monitoring self-checkout stations.

It limits the types of items that can be purchased at self-checkout, including those requiring age verification and it establishes a 15 item limit for self-checkout transactions. Members, last year we began this conversation on SB 1146, and we did so in a very dramatic time where, and I want to say traumatic time.

As you know, we tried to look at solutions for retail theft and unfortunately, most of the solutions that we focused on would result in perpetuating some of the long existing harms of building pathways and pipelines into prisons out of communities that look a lot like mine in South LA.

The intent of this Bill, as last year and this year, were to ensure that we look at all ways in which retail theft happens and we particularly focus on areas where we see the most significant amount of retail theft, which happens to be at our self-checkout stations.

And we also heard very clearly the concerns of the opposition. And we worked—after we did not get that Bill out, we worked very hard over break to make sure that we listened to those concerns and began to rebuild this policy in a way that incorporated those concerns.

And I think we did a great and fair job of that. We removed many of the provisions that would—that caused great concern—which was our consequential workplace technology survey and assessment. And we listened, again, and we removed those provisions. And, and since this Bill was introduced, we've taken even more steps to address concerns by the opposition.

We have taken amendments to remove provisions requiring public notice of self-checkout. We substantially decrease penalties, we remove the private right of action, and the shift enforcement to the Labor Commissioner and to remove the prohibition on items locked behind cabinets.

So, significant, significant changes to this Bill. Since the passage we know of our retail theft package from Prop 36, I want, you know, that we are implementing and the state is doing all that we can to ensure that we are addressing retail theft, in terms of these crimes of poverty that are happening.

This is a way to also look upstream and to figure out ways to address the problem in significant ways, particularly as the state is set to spend about $100 million to implement Prop 36, exacerbating the stress on our local jails.

And we know that the state is already spending about $133,000 to incorporate and—to incarcerate—a single person. So, as we're facing those commitments, we realize that it's important for us to address what we feel is a missing piece to the puzzle.

And that means that, you know, we begin to regulate self-checkout in a way that brings business and workers together. And while some retailers like Target and Walmart and Dollar General have already taken steps to address these challenges, it's a real piecemeal approach.

This Bill, we think, is more holistic, we think it's more fair, we think it creates consistency across the board, and we think it's a fair standard that brings solutions to employers and to consumers.

Today, with me is Nancy Mendoza with the UFCW, she is a member, to share her story, and Kristin Heidelbach, who is with the UFCW, and she's here to answer any technical questions you might have.

Thank you. Good afternoon, Chair Ortega and Committee Members. My name is Nancy Mendoza, and I work at Safeway in Redwood City. August 17th will be my 30th year at the grocery store and I am a proud UFCW local member. When I first started working at this grocery store, we didn't have self-checkout.

Working in the grocery store provided good benefits and pay that could sustain a family. And then, self-checkout was installed in our store and not long after, many of our hours were cut back.

Simply less hours means less pay which we were forced to—many of us, myself—work a second, sometimes three jobs and less pay for families that we have to cut corners in order to pay our bills and make ends meet.

At one moment, I had to tell my daughter that she wasn't going to play soccer anymore because I couldn't afford it or it was going to be get a second job. This doesn't stop inside my home. It bleeds into our communities, and we have less to spend in places like restaurants and local shops.

Interestingly enough, my store is surrounded by three senior retirement communities. Many of our customers are elderly people and our, our customers love coming in and talking to workers and having an actual human help them check out. I noticed that self-checkout was quite empty because customers didn't like using them.

The store ended up taking the machines out but then reinstalled them back into the—into the store.

And now, when it's busy and we only have two people in front of the store and that's two people us to work in departments and having to run back and forth to the check stands to help customers or getting the customers to force them to go on to self-checkout as well, making customers do the self-checkout.

This is not an inconvenience that's handing our jobs over to machines. The problem is—it's not—isolated to my store alone. I know that there are many issues with self-checkout in many of our stores and retailers. This is a statewide problem.

Workers should not be forced to do more or less time and hours and positions continue to be cut. I'm a grocery worker, a union member, and someone who cares about my community and also my coworkers, everybody that I work with. I'm asking you to support SB 442. Thank you and thank you for your time.

Thank you. Do we have additional witnesses in support?

Ivan Fernandez, California Labor Federation, proud co-sponsor. Thank you.

Equal Rights Advocates, in support. Jessica Stender.

Shane Gusman, on behalf of the Teamsters, in support.

Scott Brent, SMART Transportation Division, in support.

Cristel De Chavez, with the Mesa Verde Group, on behalf of the Consumer Federation California, in support.

Elmer Lazardi, on behalf of UAW Region 6, in support.

Mariko Yoshihar, on behalf of Tech Equity Action, in support.

Thank you. Seeing no other witnesses in support. Do we have any witnesses—main witnesses in opposition? Ashley, we should just save you your seat here.

I only have one more after this.

Ashley.

Whenever you're ready.

Okay. Hello. Ashley Hoffman, on behalf of the California Chamber of Commerce. I do want to really sincerely thank the author and sponsors. I know a lot of conversation has gone into this Bill and I think the author said it well. A lot of changes have been on this Bill since last year.

We really do thank you for that. I do just want to flag quickly kind of two outstanding concerns that we do have, one of which really just bubbled up this year and that's the issue of preemption.

I think one of our concerns is, for example, you know, recently the Long Beach City Council voted to move forward to draft an order and ends that would actually have a 2 to 1 ratio about self-checkout.

So, we would like to see, you know, whatever is progressed in this Bill to really be the state standard. Historically, preemption is a concern that we have just because it's, it's our members sometimes having to comply with different standard, right, even just a store a mile away. Second would be, you know, the 15 items or less requirement.

I know it's not an actual policy requirement. It's really just a signage, you know, and we really appreciate the addition of the language saying that if a customer, for example, brought 16 items through, right, that there would not be subject to a penalty.

I do know that is still some lower, a little bit than some of the items limits that some of my members do have. And just kind of some concerns about the precedent of just having a sign but not an actual policy. So, again, just want to say thank you for all the work that's been done.

We do just have a few outstanding concerns. So, thank you.

Thank you.

Thank you, Chair. Lovely to see you today and thank you all for your time.

I also want to kind of echo Ashley's comments in that, you know, we've been working with the Senator on this issue and having a lot of discussions over the last year and a half, and I certainly appreciate kind of the, the evolution of those conversations we've had over time.

But, you know, unfortunately, I'm still here today to express my strong opposition to this Bill. Daniel Conway, on behalf of the California Grocers Association. You know, ultimately, we still see this Bill as is being—having—a number of really arbitrary provisions that don't ultimately add up to an improved shopping experience for the customer, right?

And we look at this Bill and ultimately, what it's going to do is it's going to make in store shopping more expensive because, as both the author and sponsors have acknowledged, that technology is often used to reduce cost of labor.

So, by increasing labor costs, you're going to increase grocery costs, and at the same time, you're going to introduce more friction into the shopping process in store. And what's been fascinating, you know, this Bill got a lot of attention last year.

And so, coming back this year with a new version of it, we've had a lot of conversations with staff, with media and others, people trying to understand kind of what, what, what the direction here is with this Bill.

And I think ultimately, we see this as something that is, you know, people are, people are asking like, is this legislating customer service? Right? Or is this legislating profitability? If we're concerned about, you know, too much theft at the front of the store. And so, we Continue to struggle to really understand the purpose of this Bill.

As Ashley alluded to, some of these provisions where we're basically making our employees enforce state law is just problematic for us. You know, we saw that during Pandemic, the kind of conflict that can create. It's one thing we're dealing with a global health crisis.

It's another thing when we're trying to explain to people that the sign doesn't mean what it says it means. So, we just see a lot of problems with that. I think, lastly, the genesis of checkout is self-checkout is really to give customers the option, right?

Like sometimes you're in a hurry, you've had a long day at work, you've been sitting in committees all day, you just want to be able to pick up three things without talking to people and be on your way. And so, we want to continue to give customers that flexibility, that optimization.

We don't want to make it, you know, more expensive and more difficult to kind of navigate your way through the store. And the last thing, of course, I'll say is, you know, we began this legislative session with a real focus on affordability, right?

And from Speaker Rivas on down, you know, we heard comments about, you know, charting a new path forward and focusing on affordability. And we look at this Bill and, you know, this seems like a clear example of why Californians pay the highest prices for groceries, regardless of what checkout line they go through, right?

Because it's legislation like this that just adds cost, adds burdens to the operations of these stores that ultimately end up impacting our customers, bottom line. So, for all these reasons, we're here in our strong opposition. Thank you so much for your time today.

Thank you. I will turn it—do we have any other witnesses in opposition?

Sarah Polamu, with the California Retailers Association. I just want to thank you, Senator, and your staff for continuing to work with us as well, and the authors. We very much appreciate that and we're going to continue to work with you.

Thank you. I'll turn it over to the dais. Members, if you have questions. Senate Member Carla.

Thank you, and thank you so much, Senator, for bringing this Bill forward. I don't know if I can disagree with more points that were just made from our friends with the grocers. Just based upon what on the ground experience is—improve shopping experience.

I think if you think, if—you must not be going to the stores, if you think there's an improved shopping experience from these self-checkout, because what's been happening is they add so much self-checkout and they get rid of the cashiers. So, you don't really have a choice. You don't.

And I, you know, if it's about improved shopping experience, this 15 item or less would be, it would have been in play a long time ago by the stores themselves because it's chaotic. I have a Safeway down the street from my house—chaotic because there aren't enough cashiers.

Because the profit motive of just having people check out, do the jobs of the cashiers, increasing retail theft, pushing for Prop 36 to put the burden of dealing with retail theft on the taxpayer. And at my local Safeway, they have a sign up now that says 15 items or less.

So, if it's such a bad idea, you should probably tell them, hey, why are you doing this, for such a bad idea? They're already doing it. And it's because they actually have seen the shopper experience diminish.

And even then, you know, ultimately, I mean, I would like you to show me data that costs, the prices went down when automation went up because I seriously doubt that's the case.

To suggest that you somehow have to hire one or more cashiers, like you just had a couple years ago, up until automation, and all of a sudden, that's going to be the reason why costs go up, I just don't buy any of that. I think that ultimately where this Bill is right now is incredibly fair and reasonable.

To ensure you have at least one person at a checkout stand to ensure that, you know, you at least have signage up, 15 items or less. You know, I think people get guilted into that because everyone's paying attention to everyone's carts.

You'll get a lot of side eye if you start showing up with a cart full of stuff. You know, that's just a reality.

Even right now when you go to the checkout where there is a cashier that's 15 or less, people kind of, you kind of count your stuff, say, you know, I don't want to be going up there and having people like, you know, getting mad at me. And so, there is some self policing that happens.

Obviously, it's not going to be perfect, but I think our grocery stores do a good job of ensuring that folks kind of follow those general societal rules. But ultimately, I think this is long overdue. I think that it's been very interesting to see self-checkout over the last years.

I've used it, I've used cashiers. Just as a customer, seeing how now we have a few years of experience with it, and I think with those few years, I think these are very reasonable kind of guardrails to put in place that I think will be—that are reasonable for the retailers, for the grocery stores, and also will, I believe, improve customer experience.

So, I commend all parties for coming to the table and at least getting to where we are. I think it's—I think everyone has kind of suggested that it's improved upon where it may have been.

But I think that this is an important Bill to get through because right now, customers are the ones that are suffering the most with a very high cost and lower service at these same stores and not to mention, the increased theft. So, I'll end it there.

I would love to be added as a coauthor and I'll move the Bill.

Assemblymember Ward.

Great, thank you. Great, thank you for bringing the Bill forward. I think it's important that we have some statewide standard around the utility of these opportunities because they can provide a convenience, certainly, but two issues. One, certainly is somebody that wants to make sure we're protecting good paying jobs that have been around for decades.

That we want to make sure that that is something that is still a part of it, but also it needs to be a part, I think, of the customer experience because it's important to have you all have that human-facing checkout.

And not just for the sake of the job, but I would hope also for the sake of the business.

I'm really curious about the resistance to some of that because I would presume that from a loss prevention perspective, that there's a lot more activity, the ability to be able to escape the store by using automated to check out.

I know that there can be sometimes an individual on the other side that's checking receipts, but that's rarely my experience when I'm in a grocery store looking through that. And not that I've ever done this, but if you have 10 items and you're scanning through and one thing doesn't scan and maybe you drop it in your bag.

And I just got to imagine that the potential for lost opportunities here is really hitting the store's bottom line and that ultimately affects, I think, the considerations of consumer pricing that you would have to do to be able to make up for that, if this is something that's also increasing loss for a store.

So, I think there's different ways that we could be looking through that. I would also strongly agree as well about the need to maybe set a standard. Any standard that you'd want to set would be arbitrary.

But I actually don't think it's arbitrary because it's been around for as long as I've known as a kid when we have express lanes, that you go up there and whether that number is 10 or it's 15, the idea is that this is something that if you have just a cut, if you're there for a really quick trip, you can get out pretty quickly.

Because I have seen and been behind those customers that come up with a cartload full of things for the automated checkout. And that's what I want to use. And I've got to watch them. Very difficult, in a very awkward way, try to flub their way through scanning through the automated checkout.

And that backs up everybody else behind you. And so, it's just trying to sort of regulate that opportunity there for everybody else that wants to use that efficient standard as well and get on with their day.

So, I don't know if you have any response to that, but I did have a question from the analysis here about the inclusion of this as a IIPP work hazard. And I'm wondering about the rationale for that.

That was part of it was a Cortese Bill that was run last year that really looks at injury illness prevention plan. So, different ways that workers, as Nancy mentioned, they have more work placed on them because her other coworkers, lots of folks had hours cut. And so, there's more that's placed on them.

And so, it's really investigating different ways that workers could be harmed, you know, in their day to day, you know, work schedule or during the day that they're at work.

So, what's been the practical effect here is that you're having to work more?

I've gone to the store and had checkers tell me, they've asked me can you please take the items out of your basket because they have repetitive motion injuries. And so, it's different things that happen to them while at work. It's an injury illness prevention plan.

And then, there's also, just to some of the comments that were made about we don't want our workers policing people who are walking up, the signage is a suggestion to, if self-checkout is truly supposed to be for convenience, that we don't have someone walking up trying to.

I've locked up the machine before measuring and trying to weigh the wrong items. And so, we really don't want along with that is violence prevention. We don't want our workers having to get in the way of someone who's, you know, maybe had too many items at self-checkout.

You know, so those are the things that the IIPP would cover.

But, but I think that my friend here kind of answered the first part of your question around the theft and potential savings and additional profit that these corporations can make.

I don't think this Bill's going to do it because if there's one thing we agree on, it's that our employees should not be putting themselves in harm's way to stop the theft of grocery items.

And so I, I, I can understand, I understand that where a lot of these comments are coming from, but at the end of the day, I don't think this legislation will actually have those impacts, so.

Go ahead, ask your question.

Sorry. And I know we probably should be operating through the Chair as well, too. Don't, don't want to start.

Oh, I will stop when...

Thank you.

We're all friends here.

So, it's, it's, I'm still trying to reconcile, I think, the connection there because I very much strongly support and want to make sure that anything that could cause injury or illness is validated there. But I'm having trouble on this one, sort of, you know, making that link.

And I just don't want to do anything that's too onerous or otherwise to put like a legal responsibility that is not that maybe has a weak foundation. And so, that's something I think that, you know, it should be part of ongoing consideration as well, you know, as this Bill were to continue to be able to move forward.

But I also don't think that it's rare that a worker would be in an awkward place of having to say, you have 16 items and not 15 items. Again, that exists today, right now. And some of that I think is rectified by self policing as the customer behind you, which I have had that experience before.

Somebody's saying, like, you got more than 10 items there. So, I think that this can continue to be worked out, I think, through ongoing conversation.

But on the whole, I think it's important that we maybe do try to land this plan together and have some kind of common sense and standards for the utility of these automated checkout lanes. I think it would benefit everybody just to know the rules of the road.

And so, I actually see it as a positive that, you know, signage there just require recommendations there.

That signage would help everybody understand what the expectations are, don't need to be enforced, but are really, you know, suggested guidelines that I think everybody else can, 95% of us can certainly play by the rules of the road and it will help the whole experience be more positive for everybody.

And so, we'll kind of see how this goes forward. Happy to support the Bill today.

Thank you.

Any other questions? Yes, Assemblymember Lee.

Thank you. I want to thank the author for working on this Bill and this issue. Again, I want to acknowledge that I think the author and the Senator has done a lot of work to evolve the Bill from last year's version, which was a bit more detailed in its provisions.

I think it makes a lot of sense in my comments last year about really making sure there's worker safety because I've, you know, every time I've gone to grocery store safe or whatever it is, you know, there is always at least one person that is just anchored down into the self-checkout area because unfortunately, even my constituents are not as clever as they think they are sometimes and they can't always get it done themselves and there's always invariably someone tied there.

And I've always worried from a worker perspective is that you know it's, it's especially those late, when you get late at night it's hard to be manning, you know, the self-checkout stations and being the cashier and person getting to unlock things now that we've unfortunately have more items locked up and stuff.

So, I do appreciate that you have taken into consideration and talked to a lot of the stakeholders in these issues. One of the issues that either I'm misremembering from the last Bill or wasn't part of your Bill I want to address is, you know, I do—am sympathetic.

There are people that want the convenience factor of not having to talk to people. A lot of people are introverted. They just want to do their thing. Unless I'm misremembering, I think last time in your Bill, there was something to deal with like the online ordering or using through apps and stuff like that.

Is that something you were thinking about addressing in this Bill or I'm just misremembering maybe, but something about—because I'm just worried about is any consideration for those where it pushes people towards maybe an online business model or using app based. Am I misremembering? I thought maybe that was part of your Bill.

Okay, maybe it was a different Bill. Okay.

No, this is really about the in store experience and making sure that those consumers who come through have the support that they need to get through self-checkout.

And also, the workers who are helping them are not barraged attacks which we've seen of angry workers or people who are trying to steal, you know, busting through the self-checkout and they're on the front line. So, we really were focusing this Bill on the safety of workers and the customer experience to work with opposition on their concerns there.

Yeah, absolutely. I would continue to urge you to keep working with everyone in good faith. I think you've done a good job doing that. Sorry I might be missing it.

You probably are thinking there was an assessment of the technology initially. And we, early on, we amended that to a notification. The earlier Bill that has been—that whole provision has been taken out.

That was in last year?

Last year's version.

So, I was slated.

I would say it was the consequence of workplace. And then there was, there was discussion last year about the rise of online retail and to what extent legislation like this could push more people in that direction. But again, we're all kind of getting a relive last year.

But yeah, those were all kind of points that were discussed.

Okay, thank you.

Thank you. Yes, I do not want to relive last year. I sat on a lot of those conversations when it came to retail theft.

And as the Senator mentioned, the thing that continued to be dismissed or not really the light shined on was the worker factor and the fact that a lot of these workers were being put in danger because of what was happening in the stores and the self-checkout.

And unfortunately, you know, I was a coauthor then, I'm a coauthor now. When it comes to the affordability crisis, I mean, workers have to buy groceries too. And the fact that I have a worker here telling me that because of this, she couldn't send her child to soccer practice, that's a concern. That's an affordability crisis issue.

So, I see this Bill as addressing both giving a customer a better experience. I don't buy the groceries. I'm lucky that often my, because I'm here, my parents go and do that and they're, you know, and the thing they tell me all the time when I come home is I, I hate the self-checkout.

I do not like it. It usually does not work. I have to call somebody. It takes a long time for them to come. And it went from—I also have a Safeway very close to my house—it went from having five checkers to having one and then four or five self-checkouts.

So, they no longer have the choice of going to talk to a person. They're essentially having to use the self-checkout. So, you know, I'm encouraged that there's been some work done in the last two versions of the Bill.

For those reasons, today, you have an aye reco from me and I think we had a motion? Assemblymember Kalra, Assemblymember Elhawary. Secretary, please call the roll.

[Roll Call]

That bill's out. 5-0. Thank you.

Thank you.

Thank you for your time.

Thank you for your comment.

Thank you so much.

Senator, you have item number five, SB 464.

I'm just gonna spend the afternoon with you all.

Yes, we spent the morning together, and now, the afternoon.

We did. So thank you, assembly members. I am proud to present SB 464, which is a priority bill of the California legislative black caucus. SB 464 advances the goals of the reparations task force by requiring specified state workers be included in the Civil Rights Department's annual data pay data reporting.

In 2023, the task force released a final report laying out policies to address the enduring harms of slavery and the systemic racism that has followed through generations, such as limited access to managerial and supervisoral positions for black Californians.

While California has made progress on pay equity reporting, the report makes clear we need a more complete picture of workforce demographics. Data collected through the Civil Rights Department's pay data reporting already reveals serious gaps. While white Californians hold 62% of supervisory roles, black Californians make up just 4%.

Now more than ever, as DEI programs face threats at the federal level, California must stay vigilant in evaluating the progress of black Californians in the workplace and continue to build real pathways to opportunity as we are on this road to repair.

In 2019, the National Academies of Sciences released a report on the effectiveness and accuracy of the federal EEOC pay data report and that our reporting framework is modeled after that. The report noted several technical ways these pay data reports can be improved to ensure higher quality data for collecting agencies.

We have taken amendments that are planned for the next policy committee, where we will adopt from the recommendations based on the National Academy of Sciences to expand reportable job categories and to require the reporting of annual earnings rather than the use of over broad pay bans.

With me today to testify in support is Taneicia Herring with the California NAACP and Jessica Stender with the Equal Rights Advocates.

Good afternoon committee. My name is Taneicia Herring and, as the great senator said, I work on behalf of the NAACP California-Hawaii State Conference and I'm glad to be here to show our strong support for SB 464. This bill addresses the long standing pay disparities that continue to harm black workers and other marginalized communities across California.

By expanding employer data reporting required, specifically breaking down wages by race, ethnicity, gender, job category, and hours worked, this bill gives us the tools we need to track progress and hold employers accountable. As the California Reparations Task Force report clearly outlines, black Californians are earning just 72 cents for every dollar earned by white Californians.

And it is not just our pay. Our communities are remain severely underrepresented in promotions and leadership, holding only a fraction of executive level roles statewide. SB 464 is a direct response to these inequities. It takes the seriously. It takes seriously the recommendations of the reparations task.

By advancing economic transparency, strengthening enforcement, and beginning to repair historic and systemic harm. At a time when federal government was rolling back workplace diversity, equity, and inclusion efforts, California must lead with courage.

SB 464 is a necessary step toward a more just and equitable economy and a future where all workers are valued and paid fairly and, with that, I request your I vote. Thank you.

Good afternoon, chair and members.

Jessica Stender on behalf of Equal Rights Advocates. I wanted to highlight just a major contributor to gender and race based wage gaps that this bill really gets at, which is occupational segregation, which is the trend by which women and people of color are over concentrated not just in lower paid industries but even in lower paid positions within companies or in this case in government agencies.

And for that reason a really critical strategy to closing gender and race wage gaps is really addressing that issue of occupational segregation and you really can't fix what you can't see.

So providing this kind of high level view of groupings of employees within government agencies, these pay data reports will help bring patterns to light that then can incentivize public employers to make changes to hiring, recruitment, promotion practices to just ensure that they have better representation of people at all wage levels.

And we know that this kind of transparency works. There are already companies that have voluntarily chosen to disclose their pay data even beyond what's already required in California law. And they do this not out of shame, but really to acknowledge, hey, we see we have an issue here.

And here are some of the steps we're taking to try to rectify this and better represent women, people of color, and other underrepresented groups in higher wage levels. The state worker census that was released last December showed that the gender pay gap for public employees remains high with nearly a $14,000 difference between each gender's median salary.

So that's an increase from the previous year and and one of the primary reasons for this gap, the report noted, is that men hold higher paying jobs in the state than women.

So extending these pay data reporting requirements to the public sector will ensure that we have the data we need to really understand these wage gaps and where there is occupational segregation and incentivize our public agencies to do better and ensure better representation at all wage levels. For those reasons, we respectfully request your I vote. Thank you.

Do we have witnesses in support?

Mariko Yoshihara on behalf of the California Employment Lawyers Association in support.

Katherine Squire on behalf of the California Commission on the Status of Women and Girls in support.

Do we have any main witnesses in opposition?

Good afternoon, chair and members. I'm Eric Lawyer, speaking on behalf of the California State Association of Counties. I want to start by thanking the efforts of the author to narrow the bill to state employees. However, we must remain opposed unless the bill is amended to truly meet that intent.

The language in print defines an employee as, quote, a person employed in the state civil service, as that phrase is used as that phrase is defined in Article VII of the constitution. We have 25 counties who are required to have segments of their workforce administered by CALHR under what is known as the Merit System Services Program.

These workers typically include social service and child welfare service workers who are funded by the federal government. Article 7 does not define the term civil service, and based on our reading of the law, the language suggests that those 25 counties would be required to conduct the report.

That would mean 25 of our state's smallest rural counties would be required to conduct an annual report on just segments of their workforce. We believe that would skew the data in ways that are not helpful.

In addition to burdening the counties with the fewest resources, just a few small amendments would clarify that the bill truly only applies to state departments and state employees. And with that, we would happily remove our opposition. Thank you.

Thank you. Do we have any additional witnesses in opposition?

Hi, good afternoon. Just Eric Will on behalf of Rural County Representatives of California, California Special Districts Association, Urban Counties of California, and the League of California Cities. Opposed unless amended position. Thank you.

Thank you. Seeing no other witnesses, we'll call it back to our members on the dais for any questions or comments. Seeing none, the bill has been moved by Assemblymember Ward, second by Assemblymember Kalra. Senator, would you like to close?

Sure. I just want to say that public sector jobs are so important because they should reflect the communities that they are serving in, who are funding them, and whether they're rural, big, or small. I think it's important that we are able to track and see how representative our communities are in our governments and in our public sector.

This bill is, again, about repairing the harms. We can't repair what we can't see. And I think it's very important that we move forward with this bill and we've worked and we'll continue to work with the opposition to get us over the finish line. And with that I respectfully ask for your I vote.

Thank you. Secretary. Please call the roll.

On Senate Bill 464 by Smallwood-Cuevas. The motion is do pass and being re referred to the Committee on Judiciary.

[roll call]

That is out 6-0. Thank you.

Thank you assembly members.

We will I think we have one final bill, Senator Limon so we will pause while we wait for her to arrive. Thank you. Actually, we're going to do an add on to the consent calendar. Absent members.

Flora. Flora I. Chen. Chen I. Thank you.

Consent calendar is out.

While we continue to wait, we're gonna go ahead and go through some of the bills and add on the absent members. Secretary, please.

On item one, SB 7 by Senator McNerney, the motion was do pass and be referred to the Committee on Privacy and Consumer Protection. Flora? Flora is not voting. Chen?

Not voting.

Chen not voting. On item two. That is SB 238 by Smallwood-Cuevas. The motion do pass and be referred to the Committee on Privacy and Consumer Protection. Flora? Flora no. Chen? Chen is not voting. On item four, SB 442 by Smallwood-Cuevas. Motion do pass and be referred to the Committee on Appropriations. Flora? Flora is not voting.

Item 5, SB 464 Smallwood-Cuevas. Motion is do pass and be re referred to the Committee on Judiciary. Flora. Flora I. Item 7, SB 294 by Reyes, the motion is do pass and be referred to the Committee on Judiciary.

Flora? Flora I. Chen? Chen I. Ward? Item 11, SB 703 by Senator Richardson the motion is do pass and be referred to the Committee on Transportation. Flora? Flora I. Chen? Chen I.

Hi. Welcome, Senator.You have eager Members who have lots of questions. All right.

All right. So eager Members, lots of questions. I'm ready to go whenever you say, Madam Chair

Let's do this. Item number nine, SB642, whenever you're ready.

Thank you, Madam Chair and Members. This year marks the 10th anniversary of the passage of the California Fair Pay Act, a historic bipartisan measure to address gaps in the Equal Pay Act. Over the last decade, we have seen the gender pay equity continue to persist for women, with women of color experiencing the largest gaps.

SB642 makes reforms to the California Equal Pay act to ensure workers can effectively enforce their rights by harmonizing the statute of limitations with other wage statutes and allowing workers to recover all lost pay for up to 10 years. The Bill updates the California Equal Pay act by revising outdated gender binary language and clarifying the definition of wages.

SB 642 also revises the definition of pay scale to mean good faith estimate, that is expected wage range. In 2022, the Legislature passed SB 1162, which required companies with 15 or more employees to include pay scales for all job posting. This legislation does not provide any limits on the range of the pay scale.

This has led to some employers posting extremely broad pay. That's a little bit about SB6 42 does. With me today, I have Beth Mora from the California Employment Lawyers Association and Jessica Stender with Equal Rights Advocates to testify in support of the Bill.

Good afternoon, Madam Chair Members. Jessica Stender, on behalf of Equal Rights Advocates, a proud co sponsor of this Bill. While California has made very important progress on combating pay equity pay inequities, we still see really wide wage gaps for for women and particularly women of color.

On average, women in California overall are paid just 79 cents to every dollar paid to men. And that translates into $350,000 less in wages over the course of a 40 year career for women of color. As I mentioned, it's even worse for black women in California.

Over the course of a career, they will lose 1.5 million, earn less than 1.5 million less than their male counterparts, and over a 40 year career, Latinas losses climbed to $2 million.

So this gap really takes an incredible toll on women that their families, both for getting basic necessities like rent, food, diapers, but also for putting money away for retirement and savings for an emergency. So this really means that we need to continue to take forward momentum and to address this pay gap, these pay gaps affirmatively.

You already heard about many of the reforms that this Bill would make. I just want to note that on the pay transparency side, we have these really important wage range requirements in posting so that workers understand what the possible wages are and better able to negotiate.

So we need to have employers making these good faith estimates of those of those ranges.

I also wanted to just note that in clarifying the term wages to include all forms of compensation that would include stock options, fringe benefits, et cetera, that really does make the definition not only consistent with federal law, but it also ensures that we don't have any loopholes that all forms of compensation are being compared when you're looking at whether a man and a woman or a worker of one race and ethnicity versus another other are being paid equally for equal work.

And then finally, I'll just note that when we're removing the current gender binary language, we're really making sure that our pay equity law takes into account the realities of our workforce as it is today.

So I will just say that SB642 makes really common sense reforms that are needed 10 years out from the passage of the California Fair Pay Act to ensure workers can enforce their rights. And with that, we respectfully request your aye vote.

Hi, Good afternoon. My name is Beth Mora. I have represented employees for over 25 years, including in equity pay claims. One of the other critical ways that SB642 will help close the wage gap is by giving employees additional time needed to pursue their claims, by allowing them time to recover more of the wages they have lost.

This is an important and critical change because it often takes time for employees, significant time for employees to learn they are being paid unfairly. In my practice, I have represented countless women who did not know for many years that there were suffering pay disparities.

For example, when aiding with a reorganization, my client learned for the first time that her male Caucasian peers were being paid significantly more. When my client applied for maternity leave, she learned her base salary was far less than her male peers.

Or when my client approved a new direct report, she learned that her male peers and those reporting to her were being paid notably more than her. Each one of these former clients had been suffering a pay disparity for well over five years when they finally learned of it.

Once employees like my clients here have this evidence, they are often far too late to recover all that they have lost. SB642 addresses this problem by lengthening the statute of limitations to be consistent with other discrimination and wage claims.

By extending the recovery period, this allows an employee to recover more of the wages they can prove they have lost as the result of the particular discriminatory pay practice rather than just the two or potentially three years of lost wages allowable under current law. For that we urge you to pass this very important Bill. Thank you.

Thank you. Thank you. Do we have additional witnesses and support?

Mariko Yoshihara on behalf of the California Employment Lawyers Association proud co sponsor also asked to provide support for UFCW Western States Council and Consumer Attorneys of California.

Hello. Matt Lege with SEO California in support.

Hi, good afternoon. Carol Gonzalez on behalf of Hispanics Organized for Political Equality proud co-sponsor in support. Thank you.

Catherine Squire on behalf of the California Commission on the Status of Women and Girls proud co sponsor.

Michael Lojimento on behalf of Grace and Child Poverty in support. Thank you.

Kelly Wu on behalf of California Women Lawyers in support.

Good afternoon. Ellie Mueller, representing Parent Voices California, and Courage California in support.

Hi there. Jp Hanna on behalf of California Nurses Association in support.

Thank you. Seeing no other witnesses in support. Do we have any main witnesses in opposition?

We know each other well. All right. Ashley Hoffman on behlaf of the California Chamber of Commerce and actually oppose unless amended. I do want to thank the author and staff and sponsors. We've had a lot of conversations have I think you know hammered out a lot of some of the concerns we had.

They also added in some language for us from some clarity purposes on the pay scale peach as well that we had requested. So really appreciate that. Really our just last outstanding issue is the recovery period dating back 10 years. You know when when you're looking at one of these claims they are often very fact specific.

So for example in order to state a claim you do have to demonstrate right. And the employer would have to defend and show actually the burden would be on the employer to show that there was not you know, substantially similarly work happening.

And when you have such a fact specific based inquiry to go back and litigate that over the last 10 years, especially if people have left or memories have faded or what have you, that can be very difficult.

So really just aligns with a lot of our similar concerns on bills in General that are increasing kind of statute statute limitations types issue. No concern of course with raising the statute of limitations in the Bill from two to three years.

But again the recovery period dating back 10 years we think is is quite significant and unfortunately we can't support at this time. So thank you.

Thank you. Additional witnesses and opposition.

Afternoon Madam Chair and Madam Pro tem. Designate Chris Micheli here on the Civil Justice Association of California in respectfully opposed unless amended as Ms. Hoffman outlined thank you.

Thank you seeing no other witnesses in opposition turning it back to the dais do we have any questions or. Comments. Seeing okay seeing none we have a motion and a second Senator would you like to close I respectfully ask for an aye vote.

[Roll Call]

That. 5-0, that measure is out. Thank you.

See no other business. Oh. Okay we have one more add on.

On SB 294 by Reyes. The motion is do pass and be referred to the Committee on Judiciary. Mr. Ward? Ward is I.

Okay. Seeing no further business, we are now adjourned it.