BILL ANALYSIS Ó SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS Senator Tony Mendoza, Chair 2015 - 2016 Regular Bill No: AB 676 Hearing Date: June 24, 2015 ----------------------------------------------------------------- |Author: |Calderon | |-----------+-----------------------------------------------------| |Version: |February 25, 2015 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Alma Perez-Schwab | | | | ----------------------------------------------------------------- Subject: Employment: discrimination: status as unemployed KEY ISSUE Should legislation be enacted making it unlawful for an employer to discriminate against an unemployed individual who applies for employment? Should it be illegal for an employer, employment agency, or person operating an Internet job posting website to advertise or announce, in job postings, any provisions stating or indicating that an individual's current employment is a requirement for the job? ANALYSIS Existing federal and state law contains provisions that define unlawful discrimination and lawful employment practices by employers and employment agencies to protect both prospective and current employees against employment discrimination. The existing Fair Employment and Housing Act (FEHA) prohibits harassment and discrimination in employment because of, among other things, race, color, religion, sex, sexual orientation, marital status, mental and physical disability, age and/or AB 676 (Calderon) Page 2 of ? retaliation for protesting illegal discrimination related to one of these categories or for reporting patient abuse in tax supported institutions. (Government Code §12940, 12945, 12945.2) Existing law prohibits employers from discriminating, discharging or refusing to hire an employee based on an employee's lawful conduct during nonworking hours away from the employer's premises. (Labor Code §96 & 98.6) This Bill would enact various provisions of law related to discrimination against an applicant for employment based on his or her current employment status, as specified. Specifically, this bill would: 1) Define "employment status" to mean an individual's present unemployment, regardless of length of time that the individual has been unemployed. 2) Prohibit an employer, unless based on a bona fide occupational qualification, from doing either of the following: a) Publishing an advertisement or announcement for any job that includes a provision stating or indicating that an individual's current employment is a job requirement. b) Affirmatively asking an applicant for employment to disclose information concerning the applicant's current employment status until the employer has determined that the applicant meets the minimum employment qualifications for the position. 3) Prohibit an employment agency, unless based on a bona fide occupational qualification, from doing any of the following: a) Publishing an advertisement or announcement for any job that includes a provision stating or indicating that an individual's current employment is a job requirement. b) Limiting, segregating, or classifying an individual in any manner that may limit his/her access to information about jobs or referrals for consideration of AB 676 (Calderon) Page 3 of ? jobs because of the individual's employment status. c) Affirmatively asking an applicant for employment to disclose information concerning the applicant's current employment status until the employer has determined that the applicant meets the minimum employment qualifications for the position. 4) Prohibit a person who operates a job posting website, unless based on a bona fide occupational qualification, from publishing 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. 5) Provide that this bill does not prohibit an employer, employment agency, or person operating a job posting website from doing the following: a) Publishing an advertisement or announcement for any job that contains any provision setting forth qualifications for a job, including: i) Holding professional or occupational license, certificate, permit or credential; ii) Requiring a minimum level of education or training or experience; iii) Stating that only current employees of the employer will be considered. b) Obtaining information regarding employment, including recent relevant experience. c) Having knowledge of a person's employment status. d) Inquiring as to the reasons for an individual's employment status. e) Refusing to offer employment to a person because of the reasons underlying an individual's employment status. f) Otherwise making employment decisions pertaining to that individual. 6) Prohibit an employer, employment agency, or person operating a job posting website from interfering with, AB 676 (Calderon) Page 4 of ? restraining, or denying the exercise of, or the attempt to exercise, any rights provided under this bill, or discriminating against an individual because the individual has engaged in specified activities. 7) Authorize an individual aggrieved by a violation of these provisions to file a complaint with the Labor Commissioner who may impose a civil penalty against the employer of $1,000 for a first violation, $5,000 for a second, and $10,000 for each subsequent violation. COMMENTS 1." Unemployed Need Not Apply": Background on the Issue The nation has suffered from a severe unemployment crisis that has affected nearly all sectors of the economy. According to the National Employment Law Project, around 9.8 million workers were unemployed in May 2014, and 3.4 million, or 34.6 percent, of those workers were searching for work for six months or more. In the summer of 2010, news accounts began to emerge throughout the country suggesting that some employers were establishing blanket exclusions of unemployed workers from job consideration using terms like "must be currently employed" or "require current (or very recent) tenure," as part of the qualifications for employment. One of the first stories reported, in May 2010, involved accounts by media in Atlanta reporting that Sony Ericsson's newly relocated headquarters had posted a job announcement for a marketing position that explicitly stated, "No Unemployed Candidates Considered At All." Subsequently, in early 2011, the National Employment Law Project (NELP) conducted a four-week review of the nation's most prominent online job listing websites. NELP's research of job postings identified more than 150 ads that included exclusions based on current employment status. (Briefing Paper: Hiring Discrimination against the Unemployed, National Employment Law Project, July 12, 2011) Most of the ads specifically stated that applicants "must be currently employed." 2. White House Report: Addressing the Negative Cycle of Long-Term Unemployment AB 676 (Calderon) Page 5 of ? In January 2014, the White House released a report, "Addressing the Negative Cycle of Long-Term Unemployment," which explored the challenge of long-term unemployment, something it called "the worst legacy of the Great Recession." Among other things, the report found that, although the long and short-term unemployed have similar credentials overall, research suggests that the long-term unemployed face significant disadvantages in the labor market simply by virtue of their status as being long-term unemployed. Specifically, the report made the following findings: The long-term unemployed are about half as likely as the short-term unemployed to get a callback. Interview "callback" rate for otherwise identical resumes falls sharply as the length of unemployment rises, with callbacks 45 percent lower for those unemployed for eight months compared to those unemployed for just one month. To land an interview, the long-term unemployed must apply to 3.5 times as many jobs as the short-term unemployed. Applicants unemployed for seven months need to send an average of 35 resumes to online job postings to receive just one interview, compared to just 10 resumes per interview for those unemployed for only one month. Employers may be screening out applicants based on duration of unemployment, and missing the more qualified applicants. Long-term unemployed workers with relevant work experience are less likely to be invited for an interview than recently unemployed job applicants with no relevant experience. In response to these findings, the Administration announced the following initiatives: New Best Practices for Hiring and Recruiting Long-Term Unemployed: Administration has engaged with America's leading businesses to develop best practices for hiring and recruiting the long-term unemployed and ensure they receive a fair shot during hiring. Over 80 of the nation's largest businesses have signed on as well as many small- and medium-sized businesses. AB 676 (Calderon) Page 6 of ? Presidential Memorandum to Make Sure the Federal Government Does the Same: The President will also lead by example to make sure that individuals who are unemployed or have faced financial difficulties through no fault of their own receive fair treatment and consideration for employment by federal agencies. Fund programs that help find employment: The Department of Labor is seeking to fund new programs that build on models that have shown success in helping the long-term unemployed find employment through innovative partnerships and proven strategies, including job-training, subsidized employment, and sector-based strategies. 3. Need for this bill? Existing law authorizes employers to conduct an investigation, such as a background check, into an individual's character for employment purposes, as specified. Existing law also prohibits harassment and discrimination in employment because of race, color, religion, sex and sexual orientation, among others. However, nothing specifically addresses the issue of discriminating against the unemployed. Significant media attention has focused on reports that some employers are refusing to consider applicants for employment unless those individuals are currently employed in other jobs (thereby excluding from consideration those applicants who are currently unemployed). Many advocates and policymakers have referred to this phenomenon as "discrimination against the unemployed" and have argued that it is not only improper towards those who have suffered the misfortune of a layoff, but also exacerbates the downturn by keeping qualified applicants out of the job market. According to the author, in December 2014 the unemployment rate was recorded at 7.1 % and in January 2015 the duration of unemployment lasting 27 weeks or longer was recorded to have reached 2,800 individuals. This bill attempts to ban such a practice under state law by prohibiting employers from discriminating against prospective job applicants on the basis of his/her employment status. 4. Similar Efforts in Other States : AB 676 (Calderon) Page 7 of ? Similar efforts have been attempted in other states. The State of New Jersey became the first to enact a law effective in 2011. (New Jersey Statutes, Title 34, Chapter 8 B Sections 1-2-C.348B-1) The NJ statute prohibits an employer from publishing a job posting that states any of the following: (1) current employment is a job qualification; (2) currently unemployed candidates will not be considered; or (3) only currently employed job applicants will be considered. According to the National Conference of State Legislatures, in 2012 both Oregon and the District of Columbia passed a law prohibiting discrimination against the unemployed. In 2013, nine other states had introduced hiring discrimination bills. 5. Proponent Arguments : According to the author, 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." Proponents argue that the long-term unemployed are some of California's most in-need individuals whose harm is compounded when their attempts to re-enter the work force are thwarted by this type of discrimination. They cite a study which found that long-term unemployed workers with otherwise identical resumes were called back for interviews at rates 45% lower than the short-term unemployed. Proponents support the measure which seeks to prevent employers 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. They believe that this bill will level the playing field for the long-term unemployed and allow a person's credentials and qualifications to speak first, rather than their status as an unemployed individual. 6. Opponent Arguments : None received. 7. Double Referral : AB 676 (Calderon) Page 8 of ? This bill has been double referred to this Committee and the Senate Judiciary Committee. Should the bill be approved today, it will be sent to Senate Judiciary for a hearing. 8. Prior and Related Legislation : AB 2271 (Calderon) of 2014: Vetoed by the Governor AB 2271 was nearly identical to this bill and was vetoed by the Governor. Below is the Governor's veto message to AB 2271. "This bill would prohibit an employer from discriminating against job applicants based on the applicant's status as unemployed. While I support the intent of this bill, it could impede the state's efforts to connect unemployed workers to prospective employers as currently drafted. The problems facing our state's long term unemployed are great. There is no doubt that those Californians want to get back to work and I want to help them get there - unfortunately this bill does not provide the proper path to address this problem." AB 1450 (Allen) of 2012: Vetoed by the Governor This bill is similar, but not identical, to AB 1450 from 2012. This bill differs in that it merely prohibits an employer from asking an applicant to disclose information concerning his/her current employment status until the employer has determined that the applicant meets the minimum employment qualifications for the position. AB 218(Dickinson) of 2013: Chaptered AB 218 prohibits a state or local agency from asking an applicant for employment to disclose 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 specified. SUPPORT CA Conference Board of the Amalgamated Transit Union CA Conference of Machinists California Employment Lawyers Association California Labor Federation, AFL-CIO AB 676 (Calderon) Page 9 of ? California Nurses Association California State Firefighters' Association California Teamsters Public Affairs Council Engineers & Scientists of California Glendale City Employees Association International Longshore & Warehouse Union National Association of Social Workers, CA Chapter Organization of SMUD Employees Professional & Technical Engineers San Bernardino Public Employees Association San Diego County Court Employees Association Service Employees International Union San Luis Obispo County Employees Association UNITE-HERE, AFL-CIO Utility Workers Union of America OPPOSITION None received -- END --