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