BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                              2013-2014 Regular Session


          AB 2271 (Calderon)
          As Amended March 28, 2014
          Hearing Date: June 17, 2014
          Fiscal: Yes
          Urgency: No
          TMW


                                        SUBJECT
                                           
                 Employment:  Discrimination:  Status as Unemployed

                                      DESCRIPTION  

          This bill would prohibit an employer from discriminating against  
          prospective job applicants on the basis of the applicant's  
          employment status.  This bill would provide that an employer,  
          employment agency, or person operating an Internet job posting  
          Web site who discriminates against unemployed job applicants  
          would be subject to a civil penalty in an amount not to exceed  
          $1,000 for the first violation, $5,000 for the second violation,  
          and $10,000 for each subsequent violation, enforceable by the  
          Labor Commissioner.

                                      BACKGROUND  

          Following the recent financial crisis that began in 2007,  
          millions of Americans are currently unemployed.  California has  
          an unemployment rate of 7.8 percent, compared to about 6.3  
          percent nationally.  Recently, reports are surfacing that many  
          employers are requiring, as a part of the job description, that  
          the applicant be currently employed.



          On February 16, 2011, the Equal Employment Opportunity  
          Commission (EEOC) held a public hearing to examine the impact of  
          employers considering only those currently employed for job  
          vacancies.  According to the EEOC Press Statement on the  
          hearing:

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             "Throughout its 45 year history, the EEOC has identified  
            and remedied discrimination in hiring and remains committed  
            to ensuring job applicants are treated fairly," said EEOC  
            Chair Jacqueline A. Berrien.  "Today's meeting gave the  
            Commission an important opportunity to learn about the  
            emerging practice of excluding unemployed persons from  
            applicant pools."

            According to Helen Norton, Associate Professor at the  
            University of Colorado School of Law, employers and staffing  
            agencies have publicly advertised jobs in fields ranging  
            from electronic engineers to restaurant and grocery managers  
            to mortgage underwriters with the explicit restriction that  
            only currently employed candidates will be considered.   
            "Some employers may use current employment as a signal of  
            quality job performance," Norton testified.  "But such a  
            correlation is decidedly weak.  A blanket reliance on  
            current employment serves as a poor proxy for successful job  
            performance."

            "The use of an individual's current or recent unemployment  
            status as a hiring selection device is a troubling  
            development in the labor market," said Fatima Goss Graves,  
            Vice President for Education and Employment of the National  
            Women's Law Center.  She noted that this practice "may well  
            act as a negative counterweight" to government efforts to  
            get people back to work.  Women, particularly older women  
            and those in non-traditional occupations, are  
            disproportionately affected by this restriction, testified  
            Goss Graves.

            Denying jobs to the already-unemployed can also have a  
            disproportionate effect on certain racial and ethnic  
            minority community members, Algernon Austin, Director of the  
            Program on Race, Ethnicity, and the Economy of the Economic  
            Policy Institute, explained.  Unemployment rates for  
            African-Americans, Hispanics and Native Americans are higher  
            than those of whites.  When comparing college-educated  
            workers, the unemployment rate for Asians is also higher.   
            Thus, restricting applications to the currently employed  
            could place a heavier burden on people of color, he  
            concluded.

            The use of employment status to screen job applicants could  
            also seriously impact people with disabilities, according to  
                                                                      



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            Joyce Bender, an expert in the employment of people with  
            disabilities.  "Given my experience, I can say without a  
            doubt that the practice of excluding persons who are  
            currently unemployed from applicant pools is real and can  
            have a negative impact on persons with disabilities," Bender  
            told the Commission.

            Dr. William Spriggs, Assistant Secretary of Labor for  
            Policy, offered data supporting this testimony.  Spriggs  
            presented current national employment statistics showing  
            that African-Americans and Hispanics are overrepresented  
            among the unemployed.  He also stated that excluding the  
            unemployed would be more likely to limit opportunities for  
            older applicants as well as persons with disabilities.   
            (Equal Empl. Opportunity Com., Press Release, Out of Work?  
            Out of Luck:  EEOC Examines Employers' Treatment of  
            Unemployed Job Applicants at Hearing (Feb. 16, 2011)  
             [as  
            of June 8, 2014].)


          Following increased media attention to discrimination against  
          unemployed workers in hiring practices, on July 12, 2011, the  
          National Employment Law Project (NELP) released a study which  
          found that, in one month, there were more than 125 online job  
          postings that required candidates to be "currently employed."   
          According to the study, "[s]ignificantly, the fact that NELP's  
          relatively limited research yielded such a broad cross-section  
          of exclusionary ads - with postings for jobs throughout the  
          United States, by small, medium and large employers, for white  
          collar, blue collar, and service sector jobs, at virtually every  
          skill level - suggests that the practice of excluding unemployed  
          job seekers could be far more extensive than depicted in this  
          limited sample."  (National Employment Law Project, Briefing  
          Paper, Hiring Discrimination Against the Unemployed (July 12,  
          2011) p. 2.)

          Recent legislation aimed at protecting unemployed individuals  
          seeking work was enacted in New Jersey, Oregon, and the District  
          of Columbia, which now prohibit employers from specifying in  
          print or Internet job advertisements that unemployed persons  
          will not be considered for hire.  New York City amended its  
          Human Rights Law, effective June 11, 2013, to define a job  
          applicant's unemployed status as a protected class along with  
          age, race, creed, color, national origin, gender, disability,  
          marital status, partnership status, sexual orientation, and  
                                                                      



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          alienage/citizenship status and provides plaintiffs with the  
          right to pursue private civil claims.

          However, on the federal level, the Fair Employment Act of 2011,  
          the Fair Employment Opportunity Act of 2011, and the American  
          Jobs Act of 2011, were introduced and would have made it illegal  
          for employers to discriminate based on employment status, but  
          that legislation was not enacted.  (See H.R. No. 1113, 112th  
          Cong., 1st Sess. (2011); H.R. 2501, 112th Cong., 1st Sess.  
          (2011); S. 1471, 112th Cong., 1st Sess. (2011)); S. 1549, 112th  
          Cong., 1st Sess., Part III, Subtitle D (2011); H.R. 12, 112th  
          Cong., 1st Sess. (2011), Sec D.)



          Similarly, this bill would prohibit discrimination by an  
          employer based on a prospective job applicant's employment  
          status.  This bill is similar to AB 1450 (Allen, 2012), which  
          passed out of this Committee on a vote of 3-1 and was vetoed by  
          Governor Brown because he believed AB 1450 would lead to  
          unnecessary confusion.

          If this bill is approved by this Committee, it will be referred  
          to the Senate Committee on Labor and Industrial Relations.

                                CHANGES TO EXISTING LAW
           
           Existing law  , the Fair Employment and Housing Act (FEHA),  
          prohibits, as a matter of public policy, discrimination and  
          harassment in employment on the basis of race, religious creed,  
          color, national origin, ancestry, physical disability, mental  
          disability, medical condition, genetic information, marital  
          status, sex, gender, gender identity, gender expression, age,  
          sexual orientation, or military and veteran status.  (Gov. Code  
          Sec. 12940 et seq.)

           This bill  would prohibit, unless based on a bona fide  
          occupational qualification, an employer from either:
           publishing in print, on the Internet or in any other medium,  
            an advertisement or announcement for any job that includes a  
            provision stating or indicating that an individual's current  
            employment is a requirement for the job; or
           affirmatively asking an applicant for employment to disclose,  
            orally or in writing, information concerning the applicant's  
            current employment status until the employer has determined  
            that the applicant meets the minimum employment qualifications  
                                                                      



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            for the position, as stated in the published notice for the  
            job.

           This bill  would prohibit, unless based on a bona fide  
          occupational qualification, an employment agency from doing any  
          of the following:
           publishing in print, on the Internet or in any other medium,  
            an advertisement or announcement for any job that includes a  
            provision stating or indicating that an individual's current  
            employment is a requirement for a job; 
           limiting, segregating, or classifying an individual in any  
            manner that may limit that individual's access to information  
            about jobs or referrals for consideration of jobs because of  
            the individual's employment status; and
           affirmatively asking an applicant for employment to disclose,  
            orally or in writing, information concerning the applicant's  
            current employment status until the employer has determined  
            that the applicant meets the minimum employment qualifications  
            for the position, as stated in the published notice for the  
            job.
           
          This bill  would prohibit, unless based on a bona fide  
          occupational qualification, a person who operates an Internet  
          Web site for posting jobs in this state from publishing on that  
          Internet Web site an advertisement or announcement for any job  
          that includes a provision stating or indicating that an  
          individual's current employment is a requirement for a job.

           This bill  would define "employer" to mean the state or any  
          political or civil subdivision of the state and any person who  
          directly or indirectly, or through an agent or any other person,  
          employs or exercises control over the wages, hours, or working  
          conditions of any person.

           This bill  would define "employment agency" to mean any person  
          who, for a fee or other valuable consideration to be paid,  
          directly or indirectly by a jobseeker, performs, offers to  
          perform, or represents it can or will perform employment  
          services, as specified, but would not include any employment  
          counseling service or any job listing service.

           This bill  would define "employment status" to mean an  
          individual's present unemployment, regardless of the length of  
          time the individual has been unemployed. 

           This bill  would not preclude an employer, employment agency, or  
                                                                      



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          a person who operates an Internet Web site for posting jobs in  
          this state, or an agent, representative, or designee of that  
          employer, employment agency, or Internet Web site, from:
           setting forth qualifications for any job or publishing in  
            print, on the Internet or in any other medium, an  
            advertisement or announcement for any job that contains any  
            provision setting forth qualifications for a job, including:   
            (1) holding a current and valid professional or occupational  
            license, certificate, registration, permit, or other  
            credential; (2) requiring a minimum level of education or  
            training or professional, occupational, or field experience;  
            and (3) stating that only individuals who are current  
            employees of the employer will be considered for that job;
           obtaining information regarding an individual's employment,  
            including recent relevant experience; 
           having knowledge of a person's employment status;
           inquiring as to the reasons for an individual's employment  
            status; 
           refuse to offer employment to a person because of the reasons  
            underlying an individual's employment status; and
           otherwise making employment decisions pertaining to that  
            individual.

           This bill  would prohibit an employer, an employment agency, or a  
          person operating an Internet Web site for posting jobs from  
          doing either of the following:
           interfering with, restraining, or denying the exercise of, or  
            the attempt to exercise, any right provided under this bill;  
            and
           discriminating against any individual because the individual:   
            (1) opposed any practice made unlawful; (2) has instituted, or  
            caused to be instituted, any proceeding; (3) has provided, or  
            is about to provide, any information in connection with any  
            inquiry or proceeding relating to any right provided; or (4)  
            has testified, or is about to testify, in any inquiry or  
            proceeding relating to any right under this bill.

           This bill  would authorize an individual aggrieved by a violation  
          to file a complaint with the Labor Commissioner, who would be  
          authorized to impose a civil penalty against any employer,  
          employment agency, or person operating an Internet Web site for  
          posting jobs that the commissioner finds to be in violation. 

           This bill  would specify that an employer, employment agency, or  
          person operating an Internet Web site for posting jobs in  
          violation would be subject to a civil penalty of $1,000 for the  
                                                                      



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          first violation, $5,000 for the second violation, and $10,000  
          for each subsequent violation.

           This bill  would prohibit a private right of action for a  
          violation.

                                        COMMENT
           
          1.  Stated need for the bill  
          
          The author writes:
          

            Research shows that the long-term unemployed are frequently  
            overlooked and sometimes excluded from job opportunities.   
            Employers and employment agencies have posted job vacancy  
            notifications with language such as "No unemployed candidates  
            considered at all" or "Only currently employed candidates will  
            be considered." 



            The National Employment Law Project [(NELP)] has found that  
            the "falling unemployment rate and improving economic  
            conditions are not translating into adequate job opportunities  
            for millions of long-term unemployed job seekers."  A study  
            found that long-term unemployed workers with otherwise  
            identical resumes were called back for interviews at rates 45%  
            lower than the short-term unemployed.



            Also, employers are disinclined to hire even well-qualified  
            job applicants who have been out of work for six months or  
            longer.  Three Princeton economists found that only 11% of  
            those unemployed for more than 6 months will ever regain  
            steady full-time work.



            California Statistics:  40.5% of the unemployed in CA have  
            been out of work for 27 weeks or longer.  214,800 people in  
            California lost their unemployment benefits on December 28,  
            2013 when the federal unemployment benefits lapsed and 836,100  
            will lose access to benefits through 2014.

                                                                      



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            AB 2271 will make sure that the unemployed are not unfairly  
            discriminated against and provide opportunities for unemployed  
            Californians to at least get their foot in the door and prove  
            to employers they are qualified and a good candidate for the  
            job.



            AB 2271 would prevent employers, including state and local  
            agencies, or employment agencies from affirmatively asking an  
            applicant for employment to disclose information concerning  
            employment status until the employer or employment agency has  
            determined that the applicant meets the minimum employment  
            qualifications for the position.


            The bill will also prohibit an employer, employment agency, or  
            person who operates [an] Internet Web Site for posting jobs in  
            this state from publishing a job announcement or advertisement  
            containing a provision stating or indicating that an  
            individual's current employment is a requirement for the job,  
            unless based on a bona fide occupational qualification.

          2.  Discrimination protection for unemployed job seekers  


          As discussed during the February 26, 2011 public hearing held by  
          the Equal Employment Opportunity Commission (EEOC), there is an  
          emerging practice across the country of excluding unemployed  
          people from applicant pools.  (See Background.)  This bill seeks  
          to address this problem by prohibiting an employer, an  
          employment agency, or a person operating an Internet Web site  
          for posting jobs in this state from discriminating against a job  
          applicant on the basis of the applicant's employment status.


          Under federal law, Title VII covers all public and private  
          employers with 15 or more employees, and prohibits employment  
          discrimination based on race, color, religion, sex, or national  
          origin, and applies to all aspects of the employment  
          relationship, including hiring, compensation, training,  
          benefits, working conditions, discipline, promotion, and  
          termination.  California law provides more expansive  
          antidiscrimination protections for employees under the Fair  
                                                                      



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          Employment and Housing Act (FEHA), which prohibits  
          discrimination in employment on the basis of race, religious  
          creed, color, national origin, ancestry, physical disability,  
          mental disability, medical condition, genetic information,  
          marital status, sex, gender, gender identity, gender expression,  
          age, sexual orientation, or military and veteran status.  (Gov.  
          Code Sec. 12940 et seq.)

          Instead of adding employment status to the list of  
          antidiscrimination protections provided in FEHA, this bill would  
          create separate discrimination prohibitions for employment  
          status.  Although employees would not have the more expansive  
          level of protections and enforcement provisions that are  
          provided under FEHA, this bill would protect unemployed  
          individuals from discrimination while acknowledging an  
          employer's need to verify an individual's employment history as  
          well as the reasons for why he or she is unemployed.  Further,  
          the modest provisions of this bill are appropriate because most  
          employers consider this type of discrimination to be unnecessary  
          and would continue to refrain from engaging in such  
          discrimination.

          The California Labor Federation, AFL-CIO, in support, writes:

            The lingering economic downturn presents unemployed workers  
            with a wide variety of unique challenges:  our unemployment  
            rate hovers at over 8%, and those without jobs have found  
            themselves idled for historic lengths of time.  From 3 workers  
            fighting over every available job to the shifting demands of  
            today's economy, it has never been harder to find stable,  
            reliable work.

            In addition, this most recent recession gave 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 like "no  
            unemployed candidates considered at all" or "must be currently  
            employed."  Creating a perverse catch-22, these corporations  
            require that you already have a job in order to get a job. . .  
            .

            AB 2271 will help end this discrimination, whether in  
            advertisements or through hiring policies.  Employers will be  
            prohibited from inquiring about employment status before  
            assessing an applicant's qualifications, though an employer's  
            right to consider employment history will be explicitly  
                                                                      



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            protected.

            This common sense reform simply ends blanket policies that  
            exclude qualified workers, and thus the bill only affects  
            employers currently engaging in the practice.  Meanwhile,  
            California's unemployed will face one less obstacle between  
            them and a successful return to the workforce.
          This bill would limit an individual's remedies against an  
          employer, employment agency, or person operating a job posting  
          Web site to an administrative procedure in which the individual  
          would file a complaint with the Labor Commissioner.  The Labor  
          Commissioner would then be authorized to impose civil penalties  
          based on the three-tier scheme created in this bill.  Unlike AB  
          1450, which would have created a private right of action against  
          the violating party, this bill would specifically prohibit a  
          private right of action.  Also unlike AB 1450, which would have  
          required an employer who contracts with a state agency to comply  
          with the bill and would have created a breach of contract and  
          grounds for contract termination for the employer's failure to  
          comply, this bill does not include contractors with the state or  
          provide for contract termination with the contractor who fails  
          to comply.

          3.  Governor Brown's veto of AB 1450 

          This bill is similar to the enrolled version of AB 1450 (Allen,  
          2012).  In vetoing AB 1450, Governor Brown stated:

            This measure seeks to prevent discrimination against the  
            unemployed based on their job status by prohibiting employers  
            from stating in employment ads that applicants must be  
            employed.  Unfortunately, as this measure went through the  
            legislative process it was changed in a way that could lead to  
            unnecessary confusion.


           Support  :  California Employment Lawyers Association; California  
          Labor Federation, AFL-CIO; California School Employees  
          Association, AFL-CIO; Consumer Attorneys of California

           Opposition  :  None Known

                                        HISTORY
           
           Source  :  Author

                                                                      



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           Related Pending Legislation  :  None Known

           Prior Legislation  :  AB 1450 (Allen, 2012) See Background,  
          Comments 2, 3.

           Prior Vote  :

                     Assembly Floor (Ayes 51, Noes 23)
          Assembly Committee on Appropriations (Ayes 12, Noes 5)
          Assembly Committee on Labor and Employment (Ayes 5, Noes 2)

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