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), et al. 
          Amended:  8/2/16 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 adds a new provision to the Fair Employment  
          and Housing Act (FEHA) to expressly authorize an individual  
          employed under a special license under the Labor Code, as  
          specified, in a nonprofit sheltered workshop, day program, or  
          rehabilitation facility, to bring an action under FEHA for any  
          form or discrimination prohibited under that act.  This bill  
          also specifies that, in any such action, the employer has an  
          affirmative defense, as specified, if the challenged activity  
          was permitted by statute or regulation and the challenged  
          activity was necessary to serve employees with disabilities  
          under the specified special license.  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  








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          minimum wage pursuant to a specified license from the Industrial  
          Welfare Commission under existing law.  

          Senate Floor Amendments of 8/2/16 (1) authorize individuals  
          employed under a special license under the Labor Code, as  
          specified, in a nonprofit sheltered workshop, day program, or  
          rehabilitation facility, to bring actions for any form or  
          discrimination prohibited under FEHA; (2) provide employers with  
          a specified affirmative defense in such actions; and (3) codify  
          a legislative finding and declaration, as specified. 


          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, 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 FEHA, as a matter of public policy,  
            discrimination and harassment in employment on the basis of  







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            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  
            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,  







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            spouse, or child, or any individual employed under a special  
            license in a nonprofit sheltered workshop or rehabilitation  
            facility.   


          This bill:


          1)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. 


          2)Creates a limited exception to the individuals exempted from  
            the definition of "employee," under FEHA, as specified, and  
            provides that an individual employed under a special license  
            pursuant to the Labor Code, as specified, in a nonprofit  
            sheltered workshop, day program, or rehabilitation facility  
            may bring an action under FEHA for any form of harassment or  
            discrimination prohibited by FEHA. 


          3)Provides that if an individual, specified above, brings an  
            action against an employer for any form of harassment or  
            discrimination prohibited by FEHA, the employer has an  
            affirmative defense to the action by proving, by a  
            preponderance of the evidence, both of the following: 


                 The challenged activity was permitted by statute or  
               regulation.


                 The challenged activity was necessary to serve employees  
               with disabilities under a special license pursuant to the  
               Labor Code, as specified. 


          1)States that the Legislature finds and declares that the  
            definition of employee under FEHA, above, was not intended to  
            permit the harassment of, or discrimination against, an  
            individual employed under a special license pursuant to the  







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            Labor Code, as specified, in a nonprofit sheltered workshop,  
            day program, or rehabilitation facility.


          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,  
          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.  









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          Accordingly, this bill seeks to ensure that any individual  
          employed under a special license in a nonprofit sheltered  
          workshop, daycare program, or rehabilitation facility, while  
          generally exempted from the FEHA definition of an "employee,"  
          nonetheless maintains a cause of action against an employer who  
          harasses or discriminates against them in violation of FEHA,  
          except as specified. At the same time, this bill also 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. [ . . . ]   


          FISCAL EFFECT:   Appropriation:    No          Fiscal  







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          Com.:NoLocal:    No


          SUPPORT:   (Verified8/2/16)


          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:   (Verified8/2/16)


          The Alliance Supporting People with Intellectual and  
          Developmental Disabilities
          Pleasantview Industries
          San Gabriel Valley Training Center
          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.  [ . . .  ] 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."  


          ARGUMENTS IN OPPOSITION:     Several opponents to a prior  
          version of this bill, including San Gabriel Valley Training  
          Center, write that while they "fully support making the law  
          clear that ALL employees are entitled to FEHA protection from  
          discrimination and harassment," they "object to application of  
          provisions that would impose liability for non-discriminatory  







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          behavior that is essential to the employment arrangements for  
          individuals covered by the bill's provisions."  

          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
          8/3/16 18:43:11


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