BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1676


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          Date of Hearing:  May 4, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          1676 (Campos) - As Introduced January 19, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill prohibits an employer, including state and local  
          government employers, from seeking salary history information,  
          including compensation and benefits, about an applicant for  
          employment either personally or through an agent. Specifically,  
          this bill:


          1)Requires an employer, except state and local government  








                                                                    AB 1676


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            employers, upon reasonable request, to provide the pay scale  
            for a position to an applicant for employment.


          2)Provides that a violation of this bill's provisions would not  
            be subject to the misdemeanor provision.


          FISCAL EFFECT:


          Ongoing administrative costs, in the range of $100,000 to  
          $400,000 (Labor Enforcement and Compliance Fund), for the  
          Division of Labor Standards Enforcement (DLSE) to enforce  
          provisions of this bill. Costs will depend on the number of  
          claims filed with DLSE to investigate complaints.

          COMMENTS:


          1)Background. According to research by Linda Babcock, an  
            economist at Carnegie Mellon University, 51.5% of men and  
            12.5% of women asked for more money when receiving job offers.  
            She also found that when women asked (for more money), they  
            asked for 30 percent less than men requested. 



            Her research and that of others also has found that women are  
            penalized for negotiating, while men are rewarded for the same  
            behavior.  (As the actress Jennifer Lawrence wrote in Lenny  
            after the Sony hacking revealed that she was paid less than  
            her male co-stars, she didn't fight for more because "I didn't  
            want to seem 'difficult' or 'spoiled.' ") 













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            Because starting salaries determine raises and future  
            salaries, women who do not bargain lose as much as $750,000  
            for middle-income jobs and $2 million for high-income jobs  
            over their careers, Ms. Babcock found.  One solution, Ms.  
            Babcock said, is to coach women to negotiate. Another is to  
            change corporate practices so the people who set compensation  
            are aware of the disparity and are advocates for women during  
            negotiations. 





          2)Purpose. This bill is supported by the Women's Foundation of  
            California who state, "By creating a less biased structure for  
            negotiating pay during the hiring process, AB 1676 will be a  
            proactive way to help empower women to negotiate a fair salary  
            and hopefully get us closer to achieving pay equity in  
            California."


          3)Opposition. The Chamber of Commerce opposes this bill. They  
            state there are several legitimate, non-discriminatory reasons  
            why employers seek information regarding prior compensation of  
            an applicant. The employer may not have accurate wage  
            information on what the current market is for potential job  
            positions. By requesting salary information, employers can  
            adjust any unrealistic expectations or salary ranges to match  
            the current market rate for the job. According to the Chamber,  
            this has worked to the benefit of the applicant/employee. The  
            opposition also notes that California just passed SB 358,  
            deemed by many to be the "toughest equal pay law in the  
            nation." They encourage more time to allow SB 358 to take  
            effect before making additional changes. 


          4)Prior legislation. This bill is substantially similar to AB  
            1017 of 2015, except that the requirement to provide pay scale  
            information does not apply to the Legislature. Governor Brown  








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            vetoed AB 1017 and issued the following message:


          "I agree with the sponsors that we must endeavor to ensure that  
          all workers are paid fairly and do not receive a lower wage  
          because of their gender or any other immutable characteristic  
          that has no bearing on how they will perform in their job. This  
          year, I signed SB 358 that gives California the strongest equal  
          pay law in the nation. This bill, however, broadly prohibits  
          employers from obtaining relevant information with little  
          evidence that this would assure more equitable wages. Let's give  
          SB 358 a chance to work before making further changes."  


            SB 358 (Jackson) Chapter 546, Statutes of 2015, enhances the  
            California Equal Pay Act by, among other things, clarifying  
            the relative burdens of proof and prohibiting retaliation  
            against employees for disclosing or discussing their wages  
            with co-workers. 


          Analysis Prepared by:Misty Feusahrens / APPR. / (916)  
          319-2081