BILL ANALYSIS Ó AB 1354 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1354 (Dodd) As Amended September 2, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |55-23 |(June 3, 2015) |SENATE: |26-13 |(September 4, | | | | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: L. & E. SUMMARY: Enacts the Equal Pay for Equal Work Act of 2015, related to state contracting, as specified. The Senate amendments: 1)Add co-authors. 2)Specify that periodic reports by employers with 100 or more employees shall be submitted no more than annually. 3)Specify that the nondiscrimination program shall be required for employers with 100 or more employees "in the state." AB 1354 Page 2 4)Provide that an employee in the construction industry covered by a valid collective bargaining agreement shall be excluded from the calculation of the employer's total number of employees for purposes of the nondiscrimination program requirement. 5)Specify that this bill shall not be construed to negate exemptions to specified requirements in existence on January 1, 2016, as specified. 6)Delete reference in the work force analysis to an "equal pay report." 7)Change the word "gender" to "sex" throughout the bill. 8)Specify that a specified work force analysis shall include the total hours worked on an annual basis. Exempt employees shall be presumed to work 40 hours in a week for purposes of this reporting requirement. FISCAL EFFECT: According to the Senate Appropriations Committee, this bill would result in minor and absorbable costs to the Department of Fair Employment and Housing (DFEH) to receive nondiscrimination programs. This bill would result in major DFEH cost pressures, potentially in the millions annually, related to the approval and certification of contractors' nondiscrimination programs. COMMENTS: According to the author, this bill seeks to compile data on gender wage inequity among state contractors and ensure state contractors have policies for preventing unlawful discrimination. Supporters argue that aggregate data on the wage gap women face is available. However, more nuanced data breaking down job AB 1354 Page 3 category wages by gender and race has been not widely gathered. In order to appropriately target efforts to reduce and eliminate the wage gap, this data need to be collected. Requiring wage transparency ensures that employers are held accountable for maintaining pay structures in compliance with equal pay laws. Opponents, including the California Chamber of Commerce, state that this bill will place an additional barrier to state contractors and expose them to enforcement actions for alleged discrimination that is already addressed by existing law. As a preliminary matter, they note that the term "income equality program" is undefined and, therefore, it is ambiguous as to what information should or needs to be included other than data regarding compensation and anti-discrimination policies. Moreover, existing law already requires state contractors to submit a "nondiscrimination program" to the DFEH that must contain specific procedures to insure equal employment opportunity for all protected classifications under the Fair Employment and Housing Act, including gender and race. Therefore, opponents contend that existing law already precludes a contractor from engaging in any discrimination based upon gender or race, including inequitable compensation for performing the same or similar job. To the extent this bill is simply duplicating the information already required in a nondiscrimination program, it is unnecessary and will add an additional layer to a contractor's bid with the state. To the extent this bill is seeking more information from contractors, it is unclear as to what the scope of that information is or how it will indicate income inequality based upon summary data of compensation. Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091 FN: 0002072 AB 1354 Page 4