BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1650
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          ASSEMBLY THIRD READING
          AB 1650 (Jones-Sawyer) 
          As Amended  May 28, 2014
          Majority vote 

           JUDICIARY           10-0        APPROPRIATIONS      13-0        
           
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          |Ayes:|Wieckowski, Wagner,       |Ayes:|Gatto, Bocanegra,         |
          |     |Alejo, Chau, Dickinson,   |     |Bradford,                 |
          |     |Garcia, Gorell,           |     |Ian Calderon, Campos,     |
          |     |Maienschein, Muratsuchi,  |     |Eggman, Gomez, Holden,    |
          |     |Stone                     |     |Pan, Quirk,               |
          |     |                          |     |Ridley-Thomas, Wagner,    |
          |     |                          |     |Weber                     |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           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 any person submitting a bid to the state on  
            a contract involving onsite construction-related services  
            shall certify that the person does not ask an applicant for  
            onsite 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  
            justice agency, as that term is defined in Penal Code Section  
            13101.

          3)Further provides that this prohibition does not apply to the  
            extent that the employer obtains workers from a hiring hall  
            pursuant to a bona fide collective bargaining agreement. 

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee:








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          1)To the extent the bill's requirement would dissuade  
            noncompliant contractors from bidding on some state public  
            works contracts, there would be reduced competition, which  
            tends to increase contract costs somewhat.  Since the bill  
            does not completely prohibit a contractor from inquiring about  
            an applicant's conviction history-only from doing so during  
            the initial application process-it is assumed that most  
            contractors would adjust their practices accordingly in order  
            to continue seeking state contracts.  Nevertheless, given that  
            state public works contracts total several billion dollars  
            annually, the impact describe above could be sufficient to  
            increase contract costs by more than $150,000 annually.

          2)The state may incur investigation-related costs to the extent  
            it is presented with information that a bidder was not in  
            compliance with the bill's requirements.  The number of such  
            cases is unknown, but the costs could be significant,  
            involving investigative personnel and legal staff.

          3)If a state contractor was subsequently found to have been in  
            violation of the bill's requirements, there could be  
            additional costs to void the contract and engage another  
            contractor.

           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."

          Existing law as the result of AB 218 (Dickinson), Chapter 699,  
          Statutes 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 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 Penal Code  
          Section 13101, or to any individual working on a temporary or  
          permanent basis for a criminal justice agency on a contract  








                                                                  AB 1650
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          basis or on loan from another governmental entity.  These rules  
          go into effect on July 1, 2014.

          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.   
          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.  This bill does not affect existing  
          law requiring that employment standards be related to the job. 

          The United States 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."

          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,  








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          adjudication, incarceration, or correction of criminal offenders  
          or relate to the collection, storage, dissemination or usage of  
          criminal offender record information.  

          The bill also provides that this prohibition does not apply to  
          the extent that the employer obtains workers from a hiring hall  
          pursuant to a bona fide collective bargaining agreement.   
          Presumably these agreements will be consistent with the  
          provisions of this bill, at least prospectively.
           

          Analysis Prepared by  :    Kevin G. Baker / JUD. / (916) 319-2334 


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