BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
AB 488 (Gonzalez)
Version: March 31, 2016
Hearing Date: June 14, 2016
Fiscal: No
Urgency: No
RD
SUBJECT
Employment discrimination
DESCRIPTION
This bill would eliminate the current exemption for any
individual employed under a special license in a nonprofit
sheltered workshop or rehabilitation facility from the Fair
Employment and Housing Act's (FEHA) definition of "employee,"
thus protecting those individuals from any form of employment
discrimination on the basis of race, religious creed, physical
disability, mental disability, sex, age, and sexual orientation,
among other things. This bill would also provide, however, that
nothing under FEHA relating to discrimination on account of
disability shall subject an employer to legal liability for
obtaining a specified license or paying an individual with a
physical or mental disability less than minimum wage pursuant to
a specified license from the Industrial Welfare Commission under
existing law.
BACKGROUND
California law reflects a strong public policy protecting
individuals against discrimination under numerous statutes,
covering a variety of contexts. The Fair Employment and Housing
Act (FEHA) and the Unruh Civil Rights Act, for example, prohibit
discrimination in employment, housing, public accommodation, and
services provided by business establishments on the basis of
specified personal characteristics, such as sex, race, color,
religion, ancestry, national origin, age, disability, medical
condition, genetic information, marital status, or sexual
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orientation. (See Gov. Code Sec. 12920 et seq. for FEHA; Civ.
Code Sec. 51 for Unruh Civil Rights Act). Others still,
prohibit discrimination in public schools and in other
state-funded programs or activities. (See Educational Equity at
Ed. Code Sec. 200 et seq. and Equity in Higher Education Act at
Ed. Code Sec. 66270 et seq.; see also Gov. Code Section 11135 et
seq.)
Of particular import to this bill, FEHA not only protects an
employee from discrimination on protected bases, but it also
entitles the employee to certain accommodations under the law
based on, for example, their religious creed or physical or
mental disability. Further, FEHA generally protects an employee
against retaliation by the employer if the employee has opposed
any of the employer's discriminatory practices or because the
employee has filed a complaint, testified, or assisted in a FEHA
proceeding against the employer. That being said, under current
law, FEHA exempts from its definition of "employee" any person
who is employed under a special license in a nonprofit sheltered
workshop or rehabilitation facility. Thus, such individuals
employed by a nonprofit sheltered workshop or rehabilitation
facility, could presumably be discriminated against on the basis
of their sex, religion, race, marital status, national origin,
and more, without any protections under the law and without any
consequence to the employer who would otherwise be held in
violation of FEHA with respect to any other employees.
Accordingly, this bill would eliminate the current exemption
from the definition of employee for any "individual employed
under a special license in a nonprofit sheltered workshop or
rehabilitation facility." Instead, this bill would expressly
define "employee" to include an individual paid under a special
license in a sheltered workshop (regardless of whether it is a
nonprofit or for-profit workshop), rehabilitation facility, or
day program, thus affording such individuals protections and
rights under FEHA. At the same time, this bill would ensure
that an employer who obtains a specified license or pays an
individual less than minimum wage pursuant to a specified
license from the California Industrial Welfare Commission is not
legally liable for doing so under the anti-disability
discrimination provisions of FEHA.
CHANGES TO EXISTING LAW
Existing federal law , Title VII of the Civil Rights Act,
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prohibits discrimination and harassment of employees. (42
U.S.C. Sec. 2000e et seq.)
Existing federal law , Section 14(c) of the federal Fair Labor
Standards Act (FLSA), provides for the employment of certain
individuals at wage rates below the minimum wage. Under this
provision, individuals whose earnings or productive capacity is
impaired by physical or mental disability for the work to be
performed, including those related to age or injury, may be paid
less than the federal minimum wage. Certificates issued by the
Department of Labor to the employer are required for the
employer to pay the special minimum wage. (29 U.S.C. Sec.
214(c).)
Existing law authorizes mentally or physically handicapped
employees (and nonprofit sheltered workshops and rehabilitation
facilities employing them) to be issued a license by the
Industrial Welfare Commission authorizing a special subminimum
wage. (Lab. Code Secs. 1191, 1191.5.)
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. 12920, 12940 et seq.)
Existing law , FEHA, provides that it is an unlawful employment
practice, unless based upon a bona fide occupational
qualification, or, except where based upon applicable security
regulations, as specified, for an employer to refuse to hire or
employ a person or to refuse to select a person for a training
program leading to employment, or to bar or to discharge a
person from employment or from a training program leading to
employment, or to discriminate against a person in compensation
or in terms, conditions, or privileges of employment, because of
any of the above-listed protected bases. (Gov. Code Sec.
12940(a).)
Existing law , FEHA, further provides, however, that such
disability discrimination protections do not prohibit an
employer from refusing to hire or discharging an employee with a
physical or mental disability, or subject an employer to any
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legal liability resulting from the refusal to employ or the
discharge of an employee with a physical or mental disability,
where the employee, because of his or her physical or mental
disability, is unable to perform his or her essential duties
even with reasonable accommodations, or cannot perform those
duties in a manner that would not endanger his or her health or
safety or the health or safety of others even with reasonable
accommodations. (Gov. Code Sec. 12940(a)(1).)
Existing law , FEHA, prohibits an employer or other entity to
fail to make reasonable accommodation for the known physical or
mental disability of an applicant or employee; however, an
employer is not required to provide accommodation that is
demonstrated by the employer or other covered entity to produce
undue hardship, as defined. (Gov. Code Sec. 12940(m).)
Existing law , FEHA, provides that the term "employee" does not
include any individual employed by his or her parents, spouse,
or child, or any individual employed under a special license in
a nonprofit sheltered workshop or rehabilitation facility.
(Gov. Code Sec. 12926(c).)
This bill would, instead, provide that the term "employee" under
FEHA includes an individual paid under a special license in a
sheltered workshop, rehabilitation facility, or day program, but
does not include any individual employed by his or her parents,
spouse, or child.
This bill would provide that nothing under FEHA relating to
discrimination on account of disability shall subject an
employer to legal liability for obtaining a specified license or
paying an individual with a physical or mental disability less
than minimum wage pursuant to specified laws, above.
COMMENT
1. Stated need for the bill
According to the author:
The Legislature has made great strides in expanding the
protections and opportunities for most Californians under the
Fair Employment and Housing Act. From extending the bases of
potential discrimination to include age, gender, and religious
dress, to extending the definition of employee to include
unpaid interns and volunteers, previous efforts have sought to
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ensure that all California workers are fully protected in the
workplace.
However, we have failed individuals with disabilities working
in sheltered workshops and rehabilitation centers by not
addressing the exemption of these employers from these laws.
This has left individuals with disabilities working in these
settings without the same recourse as others, should a case of
discrimination or harassment arise in their workplace. While
we recognize the need for certain nuances regarding the
compensation paid to these individuals and hiring practices of
the sheltered workshops and rehabilitation centers, it is
simply unacceptable to leave this population of workers
without these basic workplace protections. It is time to get
rid of this exemption and protect all California workers as
equally as possible.
Disability Rights California, co-sponsor of this bill, writes
"[c]urrently, under state law, 'employee' does not include any
individual employed by a sheltered workshop or rehabilitation
facility. This leaves people with disabilities employed in
these settings no recourse for discrimination by their employer.
[ . . . This ] bill would change the Government Code so that
individuals with disabilities who are in sheltered work are
considered 'employees' and are provided the same protections as
other employees under California's Federal Employment and
Housing Act (FEHA). Reform is needed to strengthen rights and
protections for sheltered workshop employees who work in
highly-restrictive environments and currently are not afforded
the same protections against discrimination as other employees."
2. Sheltered workshops
The term "sheltered workshop," which is central to this bill,
refers to a supervised workplace for physically or mentally
disabled or handicapped adults. These are organizations or
environments that employ people with disabilities at subminimum
wages. State law specifically recognizes the use of sheltered
workshops and programs that pay less than minimum wage, as long
as the employee or the workshop is licensed by the State.
According to the Department of Industrial Relations, sheltered
workshop licenses can be issued for programs operated by
nonprofit organizations. (See Lab. Code Sec. 1191.5) A
license authorizing payment of a special minimum wage to a
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disabled worker can also be issued to for-profit business
establishments and disabled individuals. Any special minimum
wage paid to disabled workers must be commensurate with their
productivity and wage compared with those of experienced workers
who are not disabled but perform essentially the same type,
quality, and quantity of work in the same vicinity as the
disabled worker. The license has a specific duration and
minimum wage that must be paid to those employed in each
program. (See Lab. Code Sec. 1191.) Likewise, federal law,
Section 14c of the Fair Labor Standards Act (FLSA), provides for
the employment of certain disabled individuals at wage rates
below the minimum wage as well. These programs and the
authorization of subminimum wage within such certificated
programs are not without controversy, even within the disability
community. "Some believe this program may keep disabled
employees in isolated workshop environments and often allows
them to be paid less than the federal minimum wage. Others
believe that some form of financial support is essential to
creating and maintaining jobs for people with disabilities."
Indeed, in recent years, there has been a push to move away from
isolated programs employing primarily disabled individuals, and
towards "integrated employment," where disabled individuals work
in integrated settings and can earn a livable wage.<1> In 2014,
President Obama signed the Workforce Innovation and Opportunity
Act (WIOA), placing a number of limitations on placements at
sheltered workshops. Under WIOA, youth with disabilities (under
the age of 24) will no longer be allowed to work for less than
the federal minimum wage unless they are provided pre-employment
transition services and attempt vocational rehabilitation
services first. WIOA also requires state vocational
rehabilitation agencies to allocate at least 15 percent of their
federal funds towards such transition services. (U.S.
Department of Labor, WIOA Overview
[as of May 29,
2016].)
---------------------------
<1> "Integrated work" under state law, the Lanterman
Developmental Disabilities Services Act, is defined as the
engagement of an employee with a disability in work in a setting
typically found in the community wherein the employee interacts
with individuals without disabilities other than those who are
providing services to those individuals, to the same extent that
individuals without disabilities in comparable positions
interact with other persons. (Welf. & Inst. Code Sec. 4851(o).)
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In 2013, joining over a dozen other states, California passed
legislation declaring a state "Employment First" policy that
opportunities for integrated, competitive employment be given
the highest priority for working age individuals with
developmental disabilities, regardless of the severity of their
disabilities. That legislation, AB 1041 (Chesbro, Ch. 677,
Stats. 2013), in part required regional centers to provide
consumers aged 16 and older with information about the
Employment First Policy, options for integrated competitive
employment, and services and supports, including postsecondary
education, that are available to enable the consumer to
transition from school to work, and to obtain and keep an
integrated competitive job. Since then, the California
Department of Rehabilitation (DOR), the Department of
Developmental Services (DDS), and Department of Education (CDE)
have entered into an agreement consistent with this "Employment
First" policy and other laws to make employment in an integrated
setting, at a competitive wage, for individuals with
intellectual disabilities and developmental disabilities (ID/DD)
its highest priority. These departments, in conjunction with
Disability Rights California, are to meet with stakeholders to
identify and recommend changes in policies, practices, statutes,
or regulations in order to improve integrated, competitive
employment outcomes for these individuals. (See California
Health and Human Services Agency, California Competitive
Integrated Employment (CIE) Blueprint for Change
[as of May 29, 2016].)
Of particular concern to the proponents of this bill, is that
persons with disabilities working in such sheltered workshops do
not have the protections of the state's anti-employment
discrimination statutes.
3. Bill would protect individuals in sheltered workforces or
rehabilitation programs from discrimination on any of the
protected categories under FEHA
The Fair Employment and Housing Act (FEHA) prohibits
discrimination against an employee or employment applicant on
the basis of, among other things, sex, national origin,
ancestry, religious creed, and physical or mental disability.
(Gov. Code Sec. 12940(a).) FEHA protections also extend to the
right of accommodation and protection against retaliation.
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Specifically, FEHA requires an employer to provide reasonable
religious and disability accommodations to an employee and
provides retaliation protection for an employee who opposes any
discriminatory practices of the employer or who files a
complaint, testifies, or assists in a FEHA action. (Gov. Code
Sec. 12940(l), (m); Gov. Code Sec. 12940(h).)
Currently, however, because FEHA's definition of the term
"employee" specifically excludes any individual employed under a
special license in a nonprofit sheltered workshop or
rehabilitation facility, such protections do not extend to a
person who works in a sheltered workshop or rehabilitation
facility. (Gov. Code Sec. 12926(c).) Thus, currently, if an
individual employed by a sheltered workshop is discriminated
against on the basis of their sexual orientation or refused
accommodations for their religious practices, they would have no
protections or rights under FEHA. While such language was first
added in 1973 (AB 1126 (Dunlap, Ch. 1189, Stats. 1973)),
presumably to encourage the use of sheltered workshops and
rehabilitation facilities, such an exemption is arguably
outdated and inconsistent with this state's strong public
policies against discrimination in all contexts, from employment
to education, and business to state-funded programs. (See
Background.) Such an exemption is arguably also unnecessary,
given that state law can ensure that participation by licensed
employers in sheltered workshops does not constitute a violation
of FEHA on the basis of disability, while still affording
disabled individuals working in these workshops protection from
other forms of discrimination, such as sex, sexual orientation,
or religious discrimination, among others. Indeed, as amended
March 31, 2016, this bill would expressly protect employers who
are authorized under existing law to pay subminimum wage for
these purposes from being legally liable for discrimination on
the basis of disability under FEHA. (See Comment 4.)
In support of the bill, the California Labor Federation writes
that "[t]he 'sheltered workshops' concepts dates back to the
1930s, when misinformed attitudes regarding disabled workers led
to questionable and exploitative policies such as minimum wage
exemptions that somehow survive to this day. In some cases,
these workers earn less than a dollar an hour, and the process
by which workers are declared 'less productive' is entirely
unregulated and ripe for abuse. This FEHA exemption further
harms such workers by stripping them of basic protections
against discrimination and retaliation, robbing these
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individuals of dignity and safety on the job while their
employers escape consequences for even blatant harassment. At
minimum, disabled workers deserve at least the same FEHA
protections as other workers. AB 488 [ . . . ] deletes the
unconscionable FEHA exemption that leaves our most vulnerable
workers exposed to blatant mistreatment. With this change,
disabled Californians will finally win the basic right to a
discrimination and harassment-free workplace."
Staff notes that currently, the definition of employee under
FEHA is defined broadly by simply listing what the definition
does not include. Specifically, FEHA defines "employee" to not
include any individual employed by his or her parents, spouse,
or child, or any individual employed under a special license in
a nonprofit sheltered workshop or rehabilitation facility.
(Gov. Code Sec. 12926(c).) This bill would now define
"employee" to affirmatively include an individual paid under a
special license in a sheltered workshop, rehabilitation
facility, or day program, but to exclude any individual employed
by his or her parents, spouse, or child. If the desire is to
remove the existing exemption of individuals "employed under a
special license in a nonprofit sheltered workshop or
rehabilitation facility," such language should simply be removed
from the definition entirely. Otherwise, this bill, as
currently drafted, might be misinterpreted to mean that employee
includes only individuals "paid under a special license in a
sheltered workshop, rehabilitation facility, or day program."
The following amendment would remove any reference to sheltered
workshop, rehabilitation, or day program employees entirely from
the definition of "employee" for FEHA, thus ensuring that they
would be treated like any other employee, which hereinafter
would simply be defined to exclude individuals employed by his
or her parents, spouse, or child.
Suggested amendment:
On page 2, lines 15-17, strike "includes an individual paid
under a special license in a sheltered workshop,
rehabilitation facility, or day program but"
4. Exemption for employers paying subminimum wage pursuant to
specified law
Separate from FEHA, which protects individuals, including
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individuals with disabilities, from discrimination on the basis
of protected characteristics in employment, California law,
Sections 1191 and 1191.5 of the Labor Code provide authorization
for employers to pay subminimum wage to persons with
disabilities upon obtaining a specified license from the
Industrial Welfare Commission, which generally holds a duty to
ascertain the wages paid to all employees in this state, to
ascertain the hours and conditions of labor and employment in
the various occupations, trades, and industries in which
employees are employed in this state, and to investigate the
health, safety, and welfare of those employees.
Specifically, Section 1191 provides that for "any occupation in
which a minimum wage has been established, the commission may
issue to an employee who is mentally or physically handicapped,
or both, a special license authorizing the employment of the
licensee for a period not to exceed one year from date of issue,
at a wage less than the legal minimum wage. The commission shall
fix a special minimum wage for the licensee. Such license may be
renewed on a yearly basis." Similarly, Section 1191.5 provides
that, notwithstanding the aforementioned provision, for
nonprofit sheltered workshops, "the commission may issue a
special license to a nonprofit organization such as a sheltered
workshop or rehabilitation facility to permit the employment of
employees who have been determined by the commission to meet the
requirements in Section 1191 without requiring individual
licenses of such employees." Again, this section also requires
the commission to fix a special minimum wage for such employees
and the special license for the nonprofit corporation must be
renewed on a yearly basis, or more frequently as determined by
the commission.
Under FEHA, it is an unlawful employment practice, unless based
upon a bona fide occupational qualification, or, except where
based upon applicable security regulation, as specified, for an
employer, because of the 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 of any person, to
refuse to hire or employ the person or to refuse to select the
person for a training program leading to employment, or to bar
or to discharge the person from employment or from a training
program leading to employment, or to discriminate against the
person in compensation or in terms, conditions, or privileges of
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employment. (Gov. Code Sec. 12940(a).) By eliminating the
exemption of individuals employed under a special license in a
nonprofit sheltered workshop or rehabilitation facility from the
definition of "employees" for purposes of FEHA, this bill could
have inadvertently subjected employers who hold a valid license
under Labor Code Sections 1191 or 1191.5 to liability for paying
specified individuals with disabilities subminimum wage.
Accordingly, the author amended the bill to also expressly
specify that nothing in FEHA relating to discrimination on
account of disability shall subject an employer to legal
liability for obtaining a license pursuant to Section 1191.5 of
the Labor Code or paying an individual with a physical or mental
disability less than minimum wage pursuant to either Section
1191 or Section 1191.5 of the Labor Code.
5. Oppose unless amended
The California Disability Services Association (CDSA) writes an
oppose unless amended letter with respect to several issues,
stating that "[b]ecause of some of the most basic requirements
of FEHA, the process for placement and oversight of individuals
in sheltered workshops, rehab facilities and day programs would
be severely compromised" under the current version of the bill.
While CDSA supports "making the law clear that ALL employees are
entitled to FEHA protection from discrimination and harassment"
they believe the bill would impose liability for
non-discriminatory behavior that is essential to the employment
arrangements for individuals covered by the bill. CDSA
highlights specific areas of concern that demonstrate several
"fundamental problems with the current version of the bill" as
follows:
FEHA prohibits employers from making any inquiry, either
pre-employment or subsequent to hiring, as to whether an
applicant or employee has a disability, or the nature or
severity of that disability. It's impossible for a workshop,
facility, or program to function if it cannot even inquire as
to the disability of an employee, or to utilize that
information during the course of employment to make necessary
adjustments to the employment arrangements.
FEHA requires employers to engage in a timely, good faith,
interactive process with an employee or applicant to determine
reasonable accommodations. This bill fails to allow any
inquiry into an employee's disability, does not clarify which
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party is the "employer," and does not contemplate the process
by which an individual who cannot express their needs can be
accommodated. One of the most important aspects of these
placements is the role of the service provider responsible for
the individual serves in working with outside entities to
create employment opportunities for the individuals being
placed. [On] its face, FEHA's "interactive" requirements seem
to prevent the service provider from serving that role.
Since "day programs are not addressed in existing labor laws,
their express addition to FEHA can be read to create an
employer-employee relationship where one does not currently
exist. [ . . . ] In addition, since FEHA makes individuals
with various levels of disability personally liable for acts
of harassment, converting the day program setting into an
employment setting will inevitably promote litigation between
day program participants. These program participants do have
causes of action now for these types of incidents, but most
are resolved by the day program providers by working with the
individuals and families. [ . . . ]
CDSA urges the author to consider amending the bill "to clarify
that individuals in these settings are protected from
discrimination and harassment, while allowing for a
comprehensive review of the potential unintended consequences"
(by stakeholders convened by the Director of the Department of
Fair Employment and Housing).
Staff notes that the suggested amendment in Comment 3, above,
should help address concerns specific to day programs.
Additionally, in response to CDSA's question as to who is the
employer, co-sponsor Disability Rights California (DRC) writes
that "in the sheltered workshop [ . . . ] setting, the provider
is the employer," stressing that there is no private business
employing the client in a sheltered workshop. Moreover, as to
the concern that these workshops and facilities would not be
able to function and meet the needs of their employees
(including for purposes of reasonable accommodations) if they
cannot inquire as to the person's disabilities, DRC responds
that "State law allows for differences in treatment of people
with disabilities under the requirement that employers provide
reasonable accommodations to people with disabilities. Based on
the law, the analysis of how to do so is individualized based on
the employee's and the employer's needs." DRC also argues that
"[t]he provider can ask questions under FEHA pre-employment,
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after making a job offer, that are job related and consistent
with business necessity. AB 488 could also be clarified to
indicate that sheltered workshops [ . . . ] could ask
disability-related questions necessary to employ clients."
Support : Arc and United Cerebral Palsy California
Collaboration; California Labor Federation; SEIU California;
Special Needs Network
Opposition : California Disability Services Association
HISTORY
Source : Disability Rights California; State Council on
Developmental Disabilities
Related Pending Legislation : None Known
Prior Legislation : None Known
Prior Vote :
Assembly Floor (Ayes 69, Noes 0)
Assembly Labor and Employment Committee (Ayes 7, Noes 0)
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