BILL ANALYSIS Ó AB 1354 Page 1 Date of Hearing: May 6, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 1354 (Dodd) - As Introduced February 27, 2015 ----------------------------------------------------------------- |Policy |Labor and Employment |Vote:|5 - 2 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill enacts the Equal Pay for Equal Work Act of 2015 related to state contracting. Specifically, this bill: AB 1354 Page 2 1)Provides that, prior to becoming a contractor or subcontractor with the state, an employer with 100 or more employees shall submit an "income equality program" to the Department of Fair Employment and Housing (DFEH) for approval and certification and shall be required to submit periodic reports of its compliance with that program. 2)Specifies that the "income equality program" shall include the collection of summary data on the compensation paid to employees, including data sorted by gender and race, and include policies designed to ensure income equality and prevent unlawful discrimination. FISCAL EFFECT: 1)Ongoing General Fund administrative costs to DFEH in the millions of dollars to process thousands of contracts annually. Based on a review of the Department of General Services state contract database, an average of 95,000 contracts were awarded annually over a four year period. Assuming this number of contracts, DFEH estimates approximately 80 ongoing positions would be needed to maintain the database, generate reports, provide correspondence and perform other administrative tasks. This estimate does not include review of subcontractors involved in these contracts. Information on subcontractors is not currently readily available and would likely add additional workload. 2)One-time costs to DFEH of approximately $1 million GF to implement a software system to collect and compile data. AB 1354 Page 3 COMMENTS: 1)Background. On August 6, 2014, the U.S. Department of Labor's Office of Federal Contract Compliance Programs issued a Notice of Proposed Rulemaking requiring covered federal contractors and subcontractors with more than 100 employees to submit electronically an annual equal pay report on employee compensation. Information would include total number of workers within a specific job category, total W-2 wages for all workers on the job and total hours worked, broken down by race, ethnicity and sex. The proposal fulfills the Secretary of Labor's responsibility under President Obama's Presidential Memorandum, 'Advancing Pay Equality Through Compensation Data Collection,' to develop a rule requiring federal contractors and subcontractors to submit to DOL summary data on the compensation paid to their employees, including data by sex and race. 2)Purpose. According to the author, this bill builds on the same goal as President Obama's actions from last year through the compilation of data on gender wage inequity among state contractors and will ensure state contractors have policies for preventing unlawful discrimination. Analysis Prepared by:Misty Feusahrens / APPR. / (916) 319-2081 AB 1354 Page 4