BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1354|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 1354
Author: Dodd (D), et al.
Amended: 9/2/15 in Senate
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE: 9-3, 7/14/15
AYES: Hall, Block, Galgiani, Glazer, Hernandez, Hill, Hueso,
Lara, McGuire
NOES: Gaines, Runner, Vidak
NO VOTE RECORDED: Berryhill
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 55-23, 6/3/15 - See last page for vote
SUBJECT: Discrimination: equal pay: state contracting
SOURCE: Author
DIGEST: This bill enacts the Equal Pay for Equal Work Act of
2015 and requires an employer with 100 or more employees in the
state and a contract of 30 days or more, prior to becoming a
contractor or subcontractor with the state, to submit a
nondiscrimination program to the Department of Fair Employment
and Housing (DFEH) and to submit periodic reports, no more than
annually, of its compliance with that program.
Senate Floor Amendments of 9/2/15 clarify that "employees" are
those employed in this state and add an exemption for employees
hired directly out of a hiring hall (collective bargaining
agreement employees).
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ANALYSIS:
Existing law:
1)Authorizes state agencies to enter into contracts for the
acquisition of goods or services upon approval by the
Department of General Services and establishes rules governing
the awarding of contracts by state agencies, including general
requirements for competitive bidding on contracts for the
acquisition of goods or services.
2)Subjects an employer, who is, or wishes to become, a
contractor with the state for public works, or for goods or
services, to various nondiscrimination requirements.
3)Provides that prior to becoming a contractor or subcontractor
with the state, an employer may be required to submit a
nondiscrimination program to the DFEH for approval and
certification and also may be required to submit periodic
reports of its compliance with that program.
This bill:
1)Requires an employer with 100 or more employees in the state
and a contract of 30 days or more, prior to becoming a
contractor or subcontractor with the state, to submit a
nondiscrimination program to the DFEH and periodic reports, no
more than annually, of its compliance with that program.
2)Provides that an employer with fewer than 100 employees in the
state or a contract of less than 30 days may be required to
submit a nondiscrimination program and if so required shall
comply with the requirements for employers with 100 or more
employees.
3)Requires DFEH to define an "employee" for purposes of the
Equal Pay for Equal Work Act of 2015 and provides that DFEH
may require approval and certification of a nondiscrimination
program.
4)Makes it explicit that this bill does not negate existing
exemptions created by DFEH through the exercise of its
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regulatory authority.
5)Stipulates that a nondiscrimination program must include
policies and procedures designed to ensure equal employment
opportunities for all applicants and employees, an analysis of
employment selection procedures, and a "workforce analysis"
that includes the following:
a) The total number of workers with a specific job category
identified by worker race, ethnicity, and sex;
b) Total wages required to be reported on Internal Revenue
Service Form W-2 for all workers within a specific job
category identified by worker race, ethnicity, and sex; and
c) The total hours worked on an annual basis for all
workers within a specific job category identified by worker
race, ethnicity, and sex. (Exempt employees shall be
presumed to work 40 hours per week for purposes of this
reporting requirement.)
6)Stipulates that an employee in the construction industry
covered by a valid collective bargaining agreement that
expressly provides for the wages, hours of work, and working
conditions of employees, premium wage rates for all overtime
worked, and regular hourly pay of not less than 30% of the
state minimum wage rate shall be excluded from calculation of
the employer's total number of employees.
7)Makes various findings and declarations relative to the fact
that disparities in pay for women have numerous negative
impacts and states legislative intent to promote pay equity
and nondiscrimination and to obtain better data on pay equity
to fully address the problem.
Background
Purpose of AB 1354. According to the author's office, this bill
requires state contractors with 100 or more employees in the
state and a contract of 30 days or more to submit an annual
report to the DFEH that includes summary data on the
compensation paid to employees sorted by sex and race, and a
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description of the employer's policies designed to ensure pay
equity and prevent unlawful discrimination. The author's office
notes that union construction contractors who are subject to a
collective bargaining agreement will be exempt from the
requirements of this bill due to the fact that they have no say
on what gender or race of employees they will receive from the
hiring hall.
The author's office references data from the United States
Census Bureau which found full-time working women, on average,
over the last decade, have continued to earn only 77 cents for
every dollar that a man earns. In 2013, that wage disparity
amounted to an average annual wage gap of $10,876 between
full-time working men and full-time working women - the
disparity is even greater for women of color, with African
American women earning only 64% of what white, non-Hispanic male
workers earn, and Latinas averaged just 56%.
The author's office points out that on August 6, 2014, the U.S.
Department of Labor's Office of Federal Contract Compliance
Programs issued a Notice of Proposed Rulemaking requiring
federal contractors and subcontractors to submit data on
employee compensation. Under terms of the proposed rule,
companies that have more than 100 employees and hold federal
contracts or subcontracts worth $50,000 or more for at least 30
days would have to submit an annual Equal Pay Report on employee
compensation to the Office of Federal Contract Compliance
Programs. 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 the Department of Labor summary data on the compensation paid
to their employees, including data by sex and race.
According to the author's office, 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
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contractors and will ensure state contractors have policies for
preventing unlawful discrimination.
Prior/Related Legislation
AB 1960 (Dickinson, Chapter 861, Statutes of 2012) required the
Department of General Services to report on business
participation levels by lesbian, gay, bisexual, and transgender
owners in contracts, as specified, beginning January 1, 2013.
AB 17 (Kehoe, Chapter 752, Statutes of 2003), among other
things, prohibited a state agency from entering into a contract
for the acquisition of goods or services in the amount of
$100,000 or more with a contractor who, in the provision of
benefits, discriminates between employees with spouses and
employees with domestic partners, or discriminates between the
domestic partners and spouses of those employees, except under
specified circumstances.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
According to the Senate Appropriations Committee:
1)Minor and absorbable DFEH costs to receive nondiscrimination
programs and to define "employee" for purposes of this bill.
(General Fund)
2)Major DFEH General Fund cost pressures, potentially in the
millions annually. If DFEH exercised authority to require
approval and certification contractors' nondiscrimination
programs, it would require approximately 80 PY of consultant
staff, plus supervisory staff and administrative support, to
support such a program. In addition, to collect and sort data
on contractors' workers by job category, race, gender,
ethnicity, wages, and hours worked, DFEH would need to
purchase a new software system at a one-time cost of
approximately $1 million, with ongoing costs of approximately
$160,000 annually (General Fund). These cost pressures could
be substantially higher if DFEH further extended the
requirements to subcontractors and to smaller businesses.
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3)Potential increase in state contracting costs (various funds),
to the extent contractors and subcontractors build the costs
to prepare a nondiscrimination program and workforce analysis
into bid prices. Contracting costs could also be impacted by
a reduction in eligible contractors or subcontractors, to the
extent some businesses fail to comply with this bill's
requirements and are deemed ineligible to contract with the
state. Reduced competition for state contracts could lead to
higher prices.
SUPPORT: (Verified 9/3/15)
American Association of University Women
California Employment Lawyers Association
California Labor Federation
California Nurses Association
Consumer Attorneys of California
Equal Rights Advocates
National Women's Law Center
9to5, National Association of Working Women
North Bay Labor Council, AFL-CIO
Women in Non Traditional Employment Roles
OPPOSITION: (Verified 9/3/15)
Air Conditioning Sheet Metal Association
Air Conditioning & Refrigeration Contractors Association
California Legislative Conference of the Plumbing, Heating and
Piping Industry
Finishing Contractors Association of Southern California
National Electrical Contractors Association - California
Chapters
United Contractors
Wall and Ceiling Alliance
ARGUMENTS IN SUPPORT: Proponents note that "the existing
nondiscrimination and compliance employment program established
in Government Code Section 12990 is a set of specific and
result-oriented procedures to which a contractor or
subcontractor commits itself to ensure employment opportunity
for all employees or applicants for employment. This bill would
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build upon the existing nondiscrimination reporting program to
require state contractors to provide summary data on employee
compensation. This bill aims to achieve the same goal as the
2014 Presidential Memorandum - to help employers take proactive
measures to ensure fair pay for their employees. Simply
compiling the data will prompt some businesses to make necessary
changes."
ARGUMENTS IN OPPOSITION: Opponents argue that "current law
already requires state contractors to submit a nondiscrimination
program to the DFEH for all protected classifications under the
Fair Employment and Housing Act. These required reports include
the contractor's policies on antidiscrimination and an analysis
of employment selection procedures based on gender and race. In
addition, under existing law they must provide DFEH with a
'workforce analysis' that lists each job title, ranks the
employees from lowest to highest paid, as well as the total
number of male and female employees in those job titles, and the
wage rate of minorities in each job title." Additionally,
opponents note, "Existing law also precludes contractors who are
subject to a collective bargaining agreement from engaging in
any discrimination based upon gender or race, including
inequitable compensation for performing the same job."
ASSEMBLY FLOOR: 55-23, 6/3/15
AYES: Alejo, Bloom, Bonilla, Bonta, Brown, Burke, Calderon,
Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh,
Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia,
Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández,
Holden, Irwin, Jones-Sawyer, Levine, Linder, Lopez, Low,
Maienschein, McCarty, Medina, Mullin, Nazarian, O'Donnell,
Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas,
Santiago, Mark Stone, Ting, Weber, Wilk, Williams, Wood,
Atkins
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Dahle,
Beth Gaines, Gallagher, Grove, Hadley, Harper, Jones, Kim,
Lackey, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson,
Steinorth, Wagner, Waldron
NO VOTE RECORDED: Chang, Thurmond
Prepared by:Arthur Terzakis / G.O. / (916) 651-1530
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9/3/15 15:04:11
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