BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 22 (Mendoza)
Hearing Date: 8/15/2011 Amended: 5/12/2011
Consultant: Bob Franzoia Policy Vote: L&IR 5-1 Judiciary
3-2
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BILL SUMMARY: AB 22 would prohibit an employer, with the
exception of certain financial institutions, from obtaining a
consumer credit report for employment purposes unless the
information is substantially job related and the position of the
person for whom the report is sought is (1) a position in the
state Department of Justice, (2) a managerial position, (3) that
of a sworn peace officer or other law enforcement position or
(4) a position for which the information contained in the report
is required to be disclosed by law or to be obtained by the
employer.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
New enforcement Up to $58 Up to $115 Up to $115Special*
requirement
* Labor Enforcement and Compliance Fund
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STAFF COMMENTS: Enforcement of this prohibition would be within
the jurisdiction of the Division of Labor Standards and
Enforcement (DLSE) within the Department of Industrial
Relations, which investigates complaints alleging discriminatory
retaliation in the workplace on the basis of various Labor Code
sections, or the Department of Fair Employment and Housing
(DFEH).
In 2010, there were 1,175 DLSE investigations completed and
decisions rendered. The Retaliation Complaint Unit has 15
investigators with an average caseload of 78 cases. An
investigator in the unit has a Deputy Labor Commissioner I
classification I ($4,357 - $5,631, total compensation $76,966
annually). If this bill resulted in a ten percent increase in
AB 22 (Mendoza)
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investigations (117.5), the related workload would require one
and one half investigators at a cost of up to $115,449 ($76,966
+ $38,483) annually.
For this practice to prompt an investigation by the DFEH there
would need to be evidence the practice was being used to
discriminate against one class of persons or if used against all
classes of persons was being used in a manner that had a greater
impact on a single protected class. This analysis assumes this
bill would have little or no impact on DFEH workload.
As part of the state government trailer bill Chapter 12/2009 (AB
12x4, Evans), the Director of Industrial Relations would be
authorized to levy a separate surcharge upon all employers, as
defined, for the purposes of deposit in the newly created Labor
Enforcement and Compliance Fund. Chapter 12 requires that the
total amount of the surcharges be allocated between employers in
proportion to payroll respectively paid in the most recent year
for which payroll information is available. The surcharge
levied shall not exceed $37,000,000 in the 2009-10, adjusted for
as appropriate to reconcile any over/under assessments from
previous fiscal years, and shall not be adjusted each year
thereafter by more than the state-local government deflator*.
The cap of $37,000,000 represents the amount expended by the
DSLE in 2008-09 for the enforcement of wage and hour violations.
To date, the deflator has not been applied.
This bill is similar to AB 2918 (Lieber) 2008, AB 943 (Mendoza)
2009 and AB 482 (Mendoza) 2010 which were vetoed by Governor
Schwarzenegger. The veto message for AB 482 noted this bill is
similar to legislation I have vetoed for the last two years on
the basis that California's employers and businesses have
inherent needs to obtain information about applicants for
employment and existing law already provides protections for
employees from improper use of credit reports. As with the last
two bills, this measure would also significantly increase the
exposure for potential litigation over the use of credit checks.
AB 22 (Mendoza)
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* The gross domestic product price deflator for purchases of
goods and services by state and local governments (GDPSL), an
index calculated by the federal government, is designed to
reflect changes in costs experienced by state and local
governments around the country. To reflect the multiple
categories in which state and local governments spend money, the
GDPSL has several components.