BILL ANALYSIS Ó
AB 1450
Page A
Date of Hearing: March 28, 2012
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 1450 (Allen) - As Amended: March 14, 2012
SUBJECT : Discrimination: employment status.
SUMMARY : Prohibits employment actions relating to an
individual's employment status, as specified. Specifically,
this bill :
1)Defines "employment status" to mean an individual's present
unemployment, regardless of the length of time that the
individual has been unemployed.
2)Prohibits an employer with 15 or more employees, unless based
upon a bona fide occupational qualification, from doing any of
the following:
a) Refusing to consider an individual or offer employment
because of the individual's employment status.
b) Publishing an advertisement or announcement for any job
that includes either:
i) A provision indicating that an individual's current
employment is a requirement of the job; or
ii) A provision indicating that an employer will not
consider an applicant for employment based on that
individual's employment status.
c) Directing an employment agency to take an individual's
employment status into account in screening or referring
applicants for employment.
3)Prohibits an employment agency, unless based upon a bona fide
occupational qualification, from doing any of the following:
a) Refusing to offer employment, or to consider or refer an
individual for employment, because of the individual's
employment status.
b) Limiting, segregating or classifying individuals in any
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manner that limits their access to information about jobs
or referrals because of their employment status.
c) Publishing an advertisement or announcement for any job
that includes either:
4)Prohibits a person who operates an Internet Web site for
posting jobs from publishing an advertisement or announcement
for any job that includes:
a) A provision indicating that an individual's current
employment is a requirement of the job; or
b) A provision indicating that an employer will not
consider an applicant for employment based on that
individual's employment status.
5)Specifies that this bill does not prohibit an employer or
other entity from doing either of the following:
a) Publishing an advertisement or announcement that sets
forth other lawful qualifications for a job, including but
not limited to, the holding of a current and valid
professional or occupational license, certificate,
registration, permit, or other credential, or a minimum
level of education or training or professional,
occupational, or field experience.
b) Printing an advertisement for a job vacancy that states
that only applicants who are currently employed by that
employer will be considered ("internal" hiring).
6)Specifies that this bill does not preclude an employer or
other entity from considering an individual's employment
history or from examining the reasons underlying an
individual's employment status in assessing an individual's
ability to perform a job or in otherwise making employment
decisions pertaining to that individual.
7)Makes a violation of these provisions subject to a civil
penalty of $1000 for the first violation, $5,000 for the
second violation, and $10,000 for each subsequent violation,
enforceable by the Labor Commissioner.
8)Provides that a state contract entered into after January 1,
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2013 shall require compliance with these requirements, and
that failure to comply may be grounds for cancelling,
terminating, or suspending the contract and debarring the
contractor from eligibility for future state contracts, as
specified.
FISCAL EFFECT : Unknown
COMMENTS : Over the last year, significant media attention has
focused on reports that some employers are refusing to consider
applicants for employment unless those individuals are currently
employed in other jobs (thereby excluding from consideration
those applicants who are currently unemployed). In this
economic downturn, many advocates and policymakers have referred
to this phenomenon as "discrimination against the unemployed."
This bill attempts to prohibit such a practice under state law.
"Unemployed Need Not Apply"
In the summer of 2010, news accounts began to emerge suggesting
that some employers were establishing a blanket exclusion of
unemployed workers from job consideration. One of the first
stories involved a report by media in Atlanta that Sony
Ericsson's newly relocated headquarters had posted a job
announcement that explicitly stated, "No Unemployed Candidates
Considered At All."
Subsequently, in early 2011 the National Employment Law Project
(NELP) conducted a four-week review of the nation's most
prominent online job listing websites. The online research
sought information on both employers and staffing firms that
were specifically identified by name from across the United
States. NELP's research of job postings identified more than
150 ads that included exclusions based on current employment
status<1>. Most of the ads specifically stated that applicants
"must be currently employed."
In June 2011, a national survey conducted by Hart Research
Associates indicated that 80 percent of respondents described
the refusal to consider unemployed job applicants as "very
unfair." Nearly two-thirds of respondents said they favored
federal legislation to make "it illegal for companies to refuse
to hire or consider a qualified job applicant solely because the
---------------------------
<1> "Briefing Paper: Hiring Discrimination Against the
Unemployed." National Employment Law Project (July 12, 2011).
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person is currently unemployed<2>."
Do Such Policies Exacerbate The Unemployment Crisis?
Advocates have argued that employer policies that preclude
consideration of the unemployed in hiring are not only
fundamentally unfair, they also reflect insensitivity to today's
severe jobs deficit:
"By any measure, the nation is suffering from a severe
unemployment crisis, cutting across nearly all sectors of
the economy. High unemployment has persisted for three
years, with the national unemployment rate hovering around
9 percent for more than two years and edging up to 9.2
percent in June 2011. Millions have been out of work for
significantly longer than in any other recession on record:
nearly 6.3 million unemployed workers have been out of work
for six months or longer, and the average spell of
unemployment has risen, reaching nearly 40 weeks, or more
than nine months, as of June 2011.
Our ongoing unemployment crisis is not the result of
unwillingness to work on the part of the unemployed, or a
mismatch between available jobs and skills of job seekers.
At the core of the crisis is the fact that there simply are
not enough jobs. Our current jobs deficit exceeds 11
million jobs, taking into account the net number of jobs
lost since December 2007 and the additional new jobs that
were needed simply to keep up with population growth. As
one small measure of the intense competition for jobs
resulting from this deficit, the ratio of unemployed
workers (that is, individuals who are without jobs and are
actively looking for work) to the number of new job
openings (net) is alarmingly high. The most recent figures
available show that during the month of May 2011, there
were more than nearly five unemployed workers for every one
job opening-the exact ratio stood at 4.7-to-13. May 2011
marked the 29th consecutive month during which there was
only one opening for at least every four unemployed
workers.
By comparison, at the start of the Great Recession in
December 2007, there were less than two unemployed workers
for every opening. Even during the prior 2001 recession and
-------------------------
<2> Id. at 3.
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its aftermath, the ratio of unemployed to job openings
peaked at 2.8-to-1-a level surpassed less than a year into
the current downturn.
Competition for jobs is stiff in every part of the country,
with unemployed workers outnumbering available job openings
by nearly four-to-one or more in every region. In the West,
the demand for scarce jobs is even greater, with five or
more unemployed workers for every opening as of May; the
South is not far behind. The ratio of unemployed workers to
job openings has roughly doubled in every region and at the
national level since the start of the Great Recession, and
in the South and West, it has roughly tripled.
Taken together, the lack of available job openings and the
denial of employment opportunities that do exist create
stark obstacles for more than 14 million unemployed who
simply want to get back to work<3>."
Similar Federal Legislative Efforts and Legislation in Other
States :
In July 2011, Representatives Rosa DeLauro (D-CT) and Henry
Johnson, Jr. (D-GA) introduced federal legislation known as the
"Fair Employment Opportunity Act of 2011," which prohibits
employers and employment agencies from refusing to consider job
applicants solely because they are unemployed.
Similar efforts have been and are being attempted in other
states. The State of New Jersey became the first such state to
enact a law, effective June 1, 2011<4>. The New Jersey statute
prohibits an employer from publishing a job posting that states
any of the following: (1) current employment is a job
qualification; (2) currently unemployed candidates will not be
considered; or (3) only currently employed job applicants will
be considered.
According to information provided by the author's office,
similar legislation is currently pending in at least eleven
other states.
ARGUMENTS IN SUPPORT :
---------------------------
<3> Id. at 4.
<4> New Jersey Statutes, Title 34, Chapter 8 B Sections
1-2-C.348B-1 to 34:8B-2.
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The co-sponsor of this bill, the California Labor Federation,
AFL-CIO argues that the current economic downturn presents
unemployed workers with a wide variety of unique challenges -
our unemployment rate hovers at over 10 percent and those
without jobs have found themselves idles for historic lengths of
time.
The co-sponsor states that, in addition, this recession has
given birth to a new and particularly insidious form of
discrimination. Across the country, many employers, employment
agencies, and online job websites have begun to openly advertise
warnings such as "no unemployed candidates considered" or "must
be currently employed." The co-sponsor argues that this creates
a perverse "catch-22"<5> wherein these employers require an
applicant already have a job in order to find a job.
The co-sponsor argues that this bill will ban such
discrimination, whether in advertisements or through hiring
policies. Employers will also be prohibited from refusing to
hire someone because of their employment status, while an
employer's right to consider employment history is explicitly
protected. They argue that this common sense reform simply ends
blanket policies that exclude qualified workers from
consideration and therefore only affects employers currently
engaging in this process. Meanwhile, California's unemployed
will face one less obstacle to finding a successful return to
the workforce.
In addition, the California Workforce Association (which
represents the 48 local workforce investment boards in
California) writes the following:
"As California climbs out of this recession, employers
should not be placing new barriers in front of unemployed
Californians as they work to regain employment and
reconstruct pre-recession lifestyles for themselves and
their families. The effect of this practice is to create a
perpetual under class that will be shut out of employment
as long as they are competing against those who are already
-------------------------
<5> According to the Random House Dictionary, a "catch-22" is a
situation in which a person is frustrated by a paradoxical rule
or set of circumstances that preclude any attempt to escape from
them. The term originates from the 1961 novel Catch-22 by
author Joseph Heller.
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employed. Passage of this bill will send a clear message
to California's employers that the state is serious about
economic recovery that benefits all Californians -
unemployed, employed and new workforce entrants seeking
first time employment."
ARGUMENTS IN OPPOSITION :
Writing in opposition to this bill, a coalition of employer
groups (including the California Chamber of Commerce) argue that
this legislation will essentially prohibit employers from
legitimately inquiring into an applicant's employment history,
due to fear that any such inquiry will ultimately lead to
penalties and costs on the basis that the applicant was
discriminated against because of his/her status as unemployed.
They also argue that it unfairly targets state contractors by
imposing a three-year debarment from state contracts if found to
have violated the provisions of the bill, thus essentially
providing a hiring preference for the unemployed with state
contractors.
Opponents state that, despite the fact that the bill states it
does not prohibit an employer from conducting a review of the
applicant's employment status or the reasons for any separation
of employment, this bill will essentially do just that:
"In order to avoid accidentally exposing an applicant's
current status as 'unemployed' during the application
process, employers will ultimately be barred from: (1)
asking for information regarding the applicant's most
recent employer; (2) the dates of employment with the most
recent employer; or (3) reasons for the separation of
employment with the most recent employer. Any of these
legitimate inquiries could reveal that the applicant is
currently unemployed, thereby subjecting the prospective
employer to fees, penalties, and an administrative claim
through the Division of Labor Standards Enforcement (DLSE),
as well as potential litigation under the Labor Code
Private Attorney General Act (PAGA), or Business and
Professions Code section 17200 et. seq. for alleged unfair
business practices."
Opponents also contend that this bill does not differentiate
between those applicants who are unemployed due to their
inadequate or insufficient performance with their most recent
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employer, versus those applicants who were unfortunately a part
of a lay-off. They contend that an employer should be allowed
to investigate the reasons a person is unemployed, including
whether the applicant was recently terminated for serious
misconduct, before offering that person a job and bringing
him/her into the workplace. They argue, however, that this bill
would place employers in the impossible situation of either: (1)
investigating an applicant's most recent employment, including
the reasons for the separation of his/her employment with the
employer and potentially face an administrative claim or
litigation for the alleged violation of this bill if the
applicant is ultimately not hired; or (2) forego any
investigation into the most recent employment of the applicant
to prevent a claim that he/she was discriminated against on the
basis of the applicant's "unemployed status," and risk a
potential negligent hiring claim on the backend for hiring an
at-risk employee that the employer knew or should have known was
a potential danger.
Finally, opponents state that this bill will not affect the
unemployment rate. If there is an available position, the
employer will ultimately hire someone. The only thing this bill
does is instruct a private employer on who they can and cannot
hire, which they believe is inappropriate. The ability to
determine which candidate is the most qualified for an available
position is an independent decision that should be left to the
employer, not state government.
The California Employment Law Counsel (CELC) does not oppose
this bill's restrictions on advertisements, but does oppose the
remaining portions of the bill related to hiring decisions
because they argue that it will result in "endless litigation
every time an unemployed person is not hired for a position."
They therefore oppose the bill unless amended.
COMMITTEE STAFF COMMENTS :
1)This bill provides that is does not prohibit specified
behavior if based upon a "bona fide occupational
qualification" (BFOQ). However, the bill does not expressly
define that term.
The bill specifies that it does not preclude an employer or
other entity from "considering an individual's employment
history or from examining the reasons underlying an
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individual's employment status in assessing an individual's
ability to perform a job or in otherwise making employment
decisions pertaining to that individual." In addition, the
bill provides that an employer may still consider other lawful
qualifications for a job, including but not limited to, the
holding of a current and valid professional or occupational
license, certificate, registration, permit, or other
credential, or a minimum level of education or training or
professional, occupational, or field experience. However, it
is unclear whether these are the factors that shall be deemed
to constitute a BFOQ, or whether that term in intended to mean
something else.
In discrimination law, BFOQ is a legal term of art that is
generally raised as an affirmative defense by employers in
employment discrimination claims. For example, the
regulations implementing the California Fair Employment and
Housing Act define a BFOQ as follows: "Where an employer or
other covered entity has a practice which on its face excludes
an entire group of individuals on a basis enumerated in the
Act (e.g., all women or all individuals with lower back
defects), the employer or other covered entity must prove that
the practice is justified because all or substantially all of
the excluded individuals are unable to safely and efficiently
perform the job in question and because the essence of the
business operation would otherwise be undermined." (Title 2,
CCR § 7286.7(b)).
The author may wish to work with the opposition to develop a
clear and workable definition for this term for purposes of
this bill that meets the interests of both sides.
2)The author and sponsors of this bill have indicated that they
do not intend for this legislation to prohibit an employer
from inquiring about job qualifications, experience at a prior
job, reason for leaving prior employment, and the like. The
bill's language has attempted to clarify this point in a
number of provisions discussed above.
Nevertheless, opponents continue to argue that potential
employers will be reluctant to inquire into such matters for
fear of litigation alleging that the ultimate employment
decision was impermissibly based on "employment status."
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The author and opponents may wish to further discuss whether
there is a manner in which to more clearly spell out the types
of information into which an employer may still validly
inquire.
3)This bill is double-referred to the Assembly Judiciary
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees
California Alliance of Retired Americans
California Employment Lawyers Association
California Labor Federation, AFL-CIO (co-sponsor)
California Nurses Association
California Professional Firefighters
California Rural Legal Assistance Foundation
California School Employees Association
California State Association of Electrical Workers
California State Pipe Trades Council
California Workforce Association
Coalition of California Utility Employees
Consumer Attorneys of California
Consumer Federation of California
International Union of Elevator Constructors
National Association of Social Workers, California Chapter
National Employment Law Project (co-sponsor)
Northern California District Council of the International
Longshore and Warehouse Union
Western States Council of Sheet Metal Workers
Opposition
Associated General Contractors
California Association of Bed & Breakfast Inns
California Association of Joint Powers Authorities
California Bankers Association
California Chamber of Commerce
California Chapter of American Fence Association
California Employment Law Council (oppose unless amended)
California Farm Bureau Federation
California Fence Contractors' Association
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California Framing Contractors Association
California Grocers Association
California Hotel & Lodging Association
California Independent Grocers Association
California Landscape Contractors Association
California League of Food Processors
California Manufacturers & Technology Association
Engineering Contractors' Association
Flasher Barricade Association
Garden Grove Chamber of Commerce
Marin Builders Association
National Federation of Independent Business
Orange County Business Council
Plumbing-Heating-Cooling Contractors Association of California
TechAmerica
TechNet
Western Electrical Contractors Association, Inc.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091