BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                        AB 488|
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                                   THIRD READING 


          Bill No:  AB 488
          Author:   Gonzalez (D) 
          Amended:  6/21/16 in Senate
          Vote:     21 

           SENATE JUDICIARY COMMITTEE:  5-2, 6/14/16
           AYES:  Jackson, Hertzberg, Leno, Monning, Wieckowski
           NOES:  Moorlach, Anderson

           ASSEMBLY FLOOR:  69-0, 1/15/16 - See last page for vote

           SUBJECT:   Employment discrimination


          SOURCE:    Disability Rights California
                     State Council on Developmental Disabilities


          DIGEST:  This bill eliminates 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 also provides, 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.  









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          ANALYSIS:  


          Existing law:


          1)Prohibits, as a matter of federal law, under Title VII of the  
            Civil Rights Act, discrimination and harassment of employees.   



          2)Provides, as a matter of federal law, Section 14(c) of the  
            federal Fair Labor Standards Act (FLSA), 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.  
             


          3)Authorizes, under Labor Code Sections 1191 and 1191.5,  
            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.  


          4)Prohibits, under the Fair Employment and Housing Act (FEHA),  
            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.  


          5)Provides, under FEHA, 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  







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            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.  


          6)Provides further under FEHA, 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 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.  


          7)Prohibits, under FEHA, 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.


          8)Provides, for purposes of FEHA, 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.   


          This bill:


          1)Repeals the language exempting an individual paid under a  
            special license in a sheltered workshop or rehabilitation  
            facility from the term "employee" under FEHA. 







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          2)Provides 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. 


          Background


          California law reflects a strong public policy protecting  
          individuals against discrimination under numerous statutes,  
          covering a variety of contexts.  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 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,  







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          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 eliminates the current exemption from the  
          definition of employee for any "individual employed under a  
          special license in a nonprofit sheltered workshop or  
          rehabilitation facility."  At the same time, this bill ensures  
          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.


          Comments


          As stated by 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  
            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  







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            equally as possible.  


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:NoLocal:    No


          SUPPORT:   (Verified6/22/16)


          Disability Rights California (co-source)
          State Council on Developmental Disabilities (co-source)
          Arc and United Cerebral Palsy California Collaboration
          California Foundation for Independent Living Centers
          California Labor Federation
          Disability Rights Education and Defense Fund
          SEIU California
          Special Needs Network 


          OPPOSITION:   (Verified6/22/16)


          The Alliance Supporting People with Intellectual and  
          Developmental Disabilities
          California Disability Services Association
          Pleasantview Industries
          San Gabriel Valley Training Center
          VIP, Inc. 
          Two individuals 


          ARGUMENTS IN SUPPORT:     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  







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          environments and currently are not afforded the same protections  
          against discrimination as other employees."  


          ARGUMENTS IN OPPOSITION:     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  
          imposes 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 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  







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               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).   

          ASSEMBLY FLOOR:  69-0, 1/15/16
          AYES:  Achadjian, Alejo, Baker, Bigelow, Bonilla, Bonta, Brough,  
            Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu,  
            Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,  
            Beth Gaines, Gallagher, Cristina Garcia, Gatto, Gipson,  
            Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger  
            Hernández, Irwin, Jones, Kim, Lackey, Levine, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk,  
            Rendon, Rodriguez, Salas, Santiago, Steinorth, Mark Stone,  
            Thurmond, Ting, Wagner, Waldron, Weber, Williams, Wood, Atkins
          NO VOTE RECORDED:  Travis Allen, Bloom, Chávez, Eduardo Garcia,  
            Gomez, Holden, Jones-Sawyer, Linder, Ridley-Thomas, Wilk

          Prepared by:Ronak Daylami / JUD. / (916) 651-4113
          6/22/16 15:14:50


                                   ****  END  ****


          










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