BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1650
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          Date of Hearing:  March 25, 2014

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                Bob Wieckowski, Chair
              AB 1650 (Jones-Sawyer) - As Introduced: February 11, 2014
                                           
                               As Proposed to be Amended
                                           
          SUBJECT  :  PUBLIC CONTRACTS: ON-SITE CONSTRUCTION EMPLOYMENT  
          PRACTICES

           KEY ISSUES  :

          1)SHOULD STATE CONTRACTORS WITH REGARD TO ON-SITE CONSTRUCTION  
            RELATED EMPLOYMENT BE REQUIRED TO FOLLOW THE SAME PROCEDURE AS  
            STATE AND LOCAL AGENCIES BY POSTPONING QUESTIONS ABOUT A JOB  
            APPLICANT'S PRIOR CRIMINAL CONVICTIONS UNTIL AFTER THE  
            EMPLOYER HAS DETERMINED THAT THE APPLICANT MEETS THE MINIMUM  
            QUALIFICATIONS FOR THE JOB IN ORDER TO AVOID INAPPROPRIATELY  
            EXCLUDING QUALIFIED JOB SEEKERS?  

          2)SHOULD CONRACT POSITIONS WITH CRIMINAL JUSTICE AGENCIES BE  
            EXEMPTED FROM THIS RULE, ALONG WITH ALL POSITIONS WITH ANY  
            EMPLOYER FOR WHICH CRIMINAL BACKGROUND CHECKS ARE LEGALLY  
            REQUIRED?

                                      SYNOPSIS
          
          This bill is consistent with but more limited than the author's  
          prior AB 870 and AB 1198, both of which passed the Committee  
          within the last year.  AB 870 was held in Appropriations and AB  
          1198 died in Accountability and Administrative Review.  As  
          proposed to be amended, this measure is narrower than its  
          immediate predecessor, AB 1198, in that it applies only to  
          on-site construction-related employment and largely exempts  
          employers who have a collective bargaining agreement with their  
          employees. 

          This bill concerns when - not whether - state contractors may  
          obtain criminal conviction information from applicants for  
          on-site construction-related employment.  Under the bill, this  
          information may be sought and considered after the state  
          contractor has determined that the applicant meets the minimum  
          qualifications for the job.  The bill exempts contract positions  
          in all criminal justice agencies, as well as all positions with  








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          any employer for which a criminal background investigation is  
          legally required.  Supporters note that last year California  
          joined a number of other states and local governments by  
          adopting AB 218 (Dickinson) which established a similar but more  
          expansive policy for state and local government as this bill  
          proposes for state contractors.

          The author and supporters state that men and women released from  
          prison often face daunting obstacles as they return home to  
          their communities, none more difficult than finding employment.   
          Not surprisingly, supporters state, after being unable to find a  
          job, many end up returning to prison, a disastrous result for  
          them, their families, communities, taxpayers, and public safety.  
           Supporters note that felony convictions are often treated as an  
          automatic disqualification in employment application procedures  
          without much justification.  Supporters conclude that the State  
          of California currently contracts with over 30,000 individuals  
          and entities for services, and that removing the conviction  
          history box can give thousands of individuals a fair shot at  
          employment while simultaneously decreasing the recidivism rate,  
          increasing economic activity and improving public safety.  Prior  
          to the proposed amendments, two business groups argued against  
          the bill, claiming that it would prohibit employers from ever  
          asking about conviction history and emphasizing that employers  
          should have the ability to use any and all hiring tools in  
          hiring their employees.  The author's proposed amendments  
          clarify the bill's application and are believed to address the  
          opponents' concerns.

           SUMMARY  :  Provides that state contractors must determine an  
          on-site construction-related job applicant's minimum  
          qualifications before obtaining and considering information  
          regarding the applicant's criminal conviction history.   
          Specifically,  this bill  :  

          1)Provides that the state shall not accept a bid from a person  
            that asks an applicant for on-site construction related  
            employment to disclose orally or in writing information  
            concerning the conviction history of the applicant on or at  
            the time of an initial employment application.

          2)Specifies that this prohibition does not apply to a position  
            for which the person or state agency is otherwise required by  
            state or federal law to conduct a conviction history  
            background check or to any contract position with a criminal  








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            justice agency, as that term is defined in Section 13101 of  
            the Penal Code.

          3)Further provides that this prohibition does not apply to a  
            person that has a collective bargaining agreement with its  
            employees that is consistent with the provisions of this  
            section.

           EXISTING LAW  :  

           1)Finds and declares that reducing barriers to employment for  
            people who have previously offended, and decreasing  
            unemployment in communities with concentrated numbers of  
            people who have previously offended, are matters of statewide  
            concern.  Further finds and declares that, consistent with the  
            2011 Realignment Legislation addressing public safety,  
            increasing employment opportunities for people who have  
            previously offended will reduce recidivism and improve  
            economic stability in our communities.  (Ch. 699, Stats.  
            2013.)

          1)Provides, effective July 1, 2014, that a state or local agency  
            shall not ask an applicant for employment to disclose, orally  
            or in writing, information concerning the conviction history  
            of the applicant, including any inquiry about conviction  
            history on any employment application, until the agency has  
            determined the applicant meets the minimum employment  
            qualifications, as stated in any notice issued for the  
            position.  This section does not apply to a position for which  
            a state or local agency is otherwise required by law to  
            conduct a conviction history background check, to any position  
            within a criminal justice agency, as that term is defined in  
            Section 13101 of the Penal Code, or to any individual working  
            on a temporary or permanent basis for a criminal justice  
            agency on a contract basis or on loan from another  
            governmental entity.  This section does not prevent a state or  
            local agency from conducting a conviction history background  
            check after complying with the foregoing provisions.  (Labor  
            Code section 432.9.)

          2)Prohibits any employer from inquiring into or requiring  
            disclosure of arrests or detentions of applicants that did not  
            result in conviction.  (Labor Code section 432.7.)

          3)Provides pursuant to federal anti-discrimination law that a  








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            facially neutral hiring policy excluding all applicants with  
            conviction records will disproportionately impact persons of  
            color, and, therefore, may violate Title VII of the Civil  
            Rights Act of 1964.  Such a policy will pass muster if it is  
            job-related and consistent with business necessity.  (See EEOC  
            Enforcement Guidance, "Consideration of Arrest and Conviction  
            Records in Employment Decisions Under Title VII of the Civil  
            Rights Act of 1964" (2012)(available at  
            http://eeoc.gov/laws/guidance/arrest_conviction.cfm).)

          4)State law likewise prohibits race discrimination in employment  
            and provides that a violation may be found where an employment  
            policy or practice has a disproportionate impact on a racial  
            group unless the policy or practice is job related and  
            consistent with business necessity.  (See Government Code  
            section 12926 et seq.)

           FISCAL EFFECT  :  As currently in print this bill is keyed fiscal.

          COMMENTS  :  According to the author, "This bill is attempting to  
          address three issues: (1) discriminatory employment practices  
          for individuals with prior criminal convictions (2) extremely  
          high unemployment rates for individuals with criminal  
          backgrounds (3) high recidivism rates within California."

           This Bill Seeks To Promote Rehabilitation and Reduce Recidivism  
          Consistent With The Goals Of Realignment.   The author explains  
          the reason for the bill as follows:

               Men and women released from prison often face daunting  
               obstacles as they return home to their communities, however  
               none can be more difficult than finding employment.  
               According to a 2006 Huffington Post survey of over 619 Los  
               Angeles County employers, only 20% said they would hire  
               people with prior convictions. Former prisoners are often  
               concentrated in a relatively small number of distressed  
               urban neighborhoods that lack the resources needed to  
               assist them in the reentry process. Not surprisingly, after  
               being unable to find a job, many end up returning to  
               prison, a disastrous result for them, their families,  
               communities, taxpayers, and public safety.

               Across California, felony convictions are often treated as  
               an automatic disqualification in employment application  
               procedures. Without much justification individuals with  








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               criminal records are excluded from being considered for  
               employment. According to a 2009 Joyce Foundation's report  
               titled, "Transitional Jobs Reentry Demonstration,"  
               employment rates for former prisoners during the year  
               following release exceeds 50 percent across the United  
               States. Studies have implicated that there is a direct  
               co-relation present between the rates of recidivism and the  
               lack of employment for individuals with criminal  
               backgrounds.

               According to the U.S. Department of Justice, an estimated  
               95 percent of all state prisoners will be released-with  
               half of these individuals expected to return to prison  
               within three years for the commission of a new crime or  
               violation of their conditions of release. This cycle of  
               recidivism not only compromises public safety, but also  
               increases taxpayer spending. 

               In order to fight this alarming trend six states, 32 U.S.  
               cities and 8 cities and counties across California  
               including San Francisco, Richmond & Alameda County have  
               removed the conviction history box from job applications in  
               public employment and contractors who conduct business with  
               the public. These entities have recognized that stable  
               employment is critical to a successful transition into the  
               community. According to a study in Illinois that followed  
               1,600 individuals recently released from state prison, only  
               8% of those who were employed for a year or more committed  
               another crime, compared to the state's 54% average  
               recidivism rate. 

               The State of California currently contracts with over  
               30,000 individuals and entities for services.  Removing the  
               conviction history box can give thousands of individuals a  
               fair shot at employment while simultaneously decreasing the  
               recidivism rate, increasing economic activity and improving  
               public safety.  

           This Bill Appears To Be Consistent With Existing State and Local  
          Employment Policy.   In the same way that this bill proposes for  
          state contractors relative to on-site construction-related jobs,  
          existing law as the result of AB 218 (Dickinson) of 2013  
          provides that a state or local agency shall not ask an applicant  
          for employment to disclose, orally or in writing, information  
          concerning the conviction history of the applicant, including  








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          any inquiry about conviction history on any employment  
          application, until the agency has determined the applicant meets  
          the minimum employment qualifications, as stated in any notice  
          issued for the position.  Like this bill, this public employment  
          rule does not apply to positions for which a state or local  
          agency is otherwise required by law to conduct a conviction  
          history background check, to any position within a criminal  
          justice agency, as that term is defined in Section 13101 of the  
          Penal Code, or to any individual working on a temporary or  
          permanent basis for a criminal justice agency on a contract  
          basis or on loan from another governmental entity.  These rules  
          go into effect on July 1, 2014.

           This Bill Seeks To Affect Only When - Not Whether - State  
          Contractors May Consider Criminal Conviction History.   This bill  
          does not prohibit or otherwise limit a state contractor who  
          employs on-site construction-related employees from conducting a  
          criminal background check or making employment decisions on the  
          basis of an applicant's prior convictions.  It simply specifies  
          when that inquiry may be conducted.  Under the bill, a covered  
          employer may ask an applicant for employment to disclose  
          information concerning his or her conviction history, and may  
          conduct a criminal background investigation, so long as they do  
          so after they have determined whether the applicant meets the  
          minimum employment qualifications.  

          Employers should of course continue to approach these decisions  
          with care to avoid violating employment discrimination laws,  
          which require that job requirements be justified when they fall  
          more heavily on some groups.  The bill does not affect existing  
          law requiring that employment standards be related to the job. 

          Supporters note that people of color are more likely than whites  
          to possess a criminal record and are especially hard hit by  
          criminal record screening in employment.  Supporters cite two  
          prominent studies which found that a criminal record reduces the  
          likelihood of a job callback or offer by about 50 percent (28  
          percent vs. 15 percent).  This criminal record "penalty" was  
          substantially greater for African Americans and Latinos in the  
          test pool.  (Devah Pager, "The Mark of a Criminal Record,"  
          American Journal of Sociology 108.5 (2003) at 957-60(available  
          at http://www.princeton.edu/~pager/pager_ajs.pdf); Devah Pager,  
          Bruce Western, & Bart Bonikowski,"Discrimination in a Low Wage  
          Labor Market: A Field Experiment," American Sociological Review  
          74 (October, 2009)at 777-779( available at  








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          http://www.princeton.edu/~pager/ASR_pager_etal09.pdf).)

          The U.S. Equal Employment Opportunity Commission (EEOC) has  
          recognized in policy guidance issued in April 2012 that there  
          are observable racial disparities in the criminal justice  
          system.  Because criminal background checks may have a disparate  
          impact on people of color, federal employment discrimination law  
          prohibits no-hire policies against people with criminal records.  
           An employer's consideration of a conviction history may pass  
          muster if an individualized assessment is made, taking into  
          account whether the conviction is job-related and the time  
          passed since the conviction.  An employer therefore risks  
          violating federal civil rights laws when it cannot articulate an  
          objective and well-supported reason why the use of a criminal  
          record to disqualify an applicant is related to the functions of  
          the job.  Thus, removing the inquiry about conviction history  
          from the initial job application promotes a case-by-case  
          assessment of the applicant, which is more consistent with the  
          law.  In keeping with the policy embodied by AB 218, the EEOC  
          guidance states: "As a best practice, and consistent with  
          applicable laws, the Commission recommends that employers not  
          ask about convictions on job applications and that, if and when  
          they make such inquiries, the inquiries be limited to  
          convictions for which exclusion would be job related for the  
          position in question and consistent with business necessity."

           Exemption for All Criminal Justice Agencies and Any Positions  
          Where Background Check Required.   Moreover, the bill contains a  
          broad exemption for any position for which a state contractor or  
          a government agency is otherwise required by law to conduct a  
          conviction history background check, as well as any contract  
          position within a criminal justice agency.  The bill uses the  
          existing definition of "criminal justice agencies," those  
          agencies at all levels of government that perform as their  
          principal functions, activities which either relate to the  
          apprehension, prosecution, adjudication, incarceration, or  
          correction of criminal offenders or relate to the collection,  
          storage, dissemination or usage of criminal offender record  
          information.  (Penal Code Section 13101.)
           
          There Is A Substantial Population Of People With Criminal  
          Records In The United States And In California Who May Be  
          Affected By This Bill.   According to the bill's co-sponsor, the  
          National Employment Law Project (NELP), an estimated 1 in 4 U.S.  
          adults has a criminal record that would appear on a routine  








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          background check.  (See "65 Million Need Not Apply: The Case for  
          Reforming Criminal Background Checks," at footnote 2 (available  
          at  
          http://www.nelp.org/page/-/SCLP/2011/65_Million_Need_Not_Apply.pd 
          f?nocdn=1).)  Using the same methodology outlined in this  
          report, NELP estimates there are approximately 7 million  
          Californian adults with criminal records.  According to  
          supporters, research has demonstrated that employment is a key  
          factor in reducing recidivism and ensuring positive public  
          safety outcomes.  Among other examples, supporters cite a recent  
          study of former prisoners in Ohio, Texas, and Illinois where  
          researchers found that inmates who held a job while in prison  
          and those who participated in job-training programs while  
          incarcerated had better employment outcomes after release.  In  
          addition, inmates who were employed and earning higher wages  
          after release were less likely to return to prison the first  
          year out.  (Christy Visher, Sara Debus & Jennifer Yahner,  
          Employment after Prison: A Longitudinal Study of Releases in  
          Three States, Justice Policy Center Research Brief (Oct.  
          2008)(available at  
          http://www.urban.org/UploadedPDF/411778_employment_after_prison.p 
          df).)  Supporters argue that the economy is negatively impacted  
          by the inability of people with criminal records to find gainful  
          employment, supporting themselves and their families.  
           
          ARGUMENTS IN OPPOSITION  :  Prior to the author's proposed  
          amendments, the California Chamber of Commerce and the Civil  
          Justice Association of California registered their opposition to  
          the bill, stating that it "eliminates a state contractor's  
          ability to investigate into the criminal history of an  
          applicant."  They stated that such a prohibition would "force  
          contractors into no-win situation, as the contractor essentially  
          has to decide between properly investigating an applicant whom  
          the contractor is considering hiring into its workforce, or  
          foregoing such investigation in order to potentially obtain a  
          new contract."  They further emphasize a concern about potential  
          liability for negligent hiring if the hired individual commits  
          an act similar to his/her previous crime.  It is believed that  
          the author's proposed amendments address these concerns.

           Author's Proposed Clarifying Amendments.   In order to clarify  
          the correct scope of the bill, the author proposes the following  
          revision, which should address the concerns of the groups in  
          opposition.  









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          Section 10186 is added to the Public Contract Code, to read:

            (a)A state agency   The state  shall not accept a bid from a  
             person that asks an applicant for on-site construction  
             related employment to disclose  orally or in writing   
             information concerning the conviction history of the  
             applicant  on or at the time of an initial employment  
             application  .  This subdivision applies to both oral and  
             written disclosures and disclosures made on an initial  
             employment application  

           (b)This section shall not apply to a position for which the  
             person or state agency is otherwise required by state or  
             federal law to conduct a conviction  or criminal  history  
             background check or to any contract position with a criminal  
             justice agency, as that term is defined in Section 13101 of  
             the Penal Code.

              (c)  This section shall not be construed to prevent a state  
               agency from accepting a bid from a person that conducts a  
               conviction history background check after complying with  
               all of the provisions of subdivision (a).
           
             (d)  This section shall not apply to a person that has a  
               collective bargaining agreement with its employees  that is  
               consistent with the provisions of this section  .

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 

           Legal Services for Prisoners with Children 
          National Association of Social Workers - California Chapter

           Opposition 

           California Chamber of Commerce
          Civil Justice Association of California
           
          Analysis Prepared by  :  Kevin G. Baker / JUD. / (916) 319-2334