BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1676


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          ASSEMBLY THIRD READING


          AB  
          1676 (Campos and Gonzalez)


          As Amended  May 31, 2016


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Labor           |4-2  |Roger Hernández, Chu, |Patterson, Linder   |
          |                |     |McCarty, Thurmond     |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |13-6 |Gonzalez, Bloom,      |Bigelow, Chang,     |
          |                |     |Bonilla, Bonta,       |Gallagher, Jones,   |
          |                |     |Calderon, Eggman,     |Obernolte, Wagner   |
          |                |     |Eduardo Garcia,       |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Roger Hernández,      |                    |
          |                |     |Holden, Quirk,        |                    |
          |                |     |Santiago, Weber, Wood |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
           ------------------------------------------------------------------ 


          SUMMARY:  Prohibits the use of employee salary history  
          information, as specified, and enacts other requirements.   








                                                                    AB 1676


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          Specifically, this bill:  


          1)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.


          2)Requires an employer, except state and local government  
            employers, upon reasonable request, to provide the pay scale  
            for a position to an applicant for employment.


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


          EXISTING LAW:  


          1)Prohibits an employer from paying an employee at wage rates  
            less than the rates paid to employees of the opposite sex in  
            the same establishment for equal work on jobs the performance  
            of which requires equal skill, effort, and responsibility, and  
            which are performed under similar working conditions. 


          2)Establishes exceptions to this prohibition where the payment  
            is made pursuant to a seniority system, a merit system, a  
            system which measures earnings by quantity or quality of  
            production, or a differential based on any bona fide factor  
            other than sex. 


          3)Makes it a misdemeanor for an employer or other person acting  
            either individually or as an officer, agent, or employee of  
            another person to pay or cause to be paid to any employee a  
            wage less than the rate paid to an employee of the opposite  








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            sex as required by these provisions, or who reduces the wages  
            of any employee in order to comply with these provisions.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, 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:  The author argues that, because changing jobs is  
          often the best opportunity women have to increase their pay, we  
          need to make sure they are not penalized by prior salaries that  
          may well have been discriminatory.  The impact of prior salaries  
          is particularly concerning in certain industries and across  
          racial lines. 


          By removing past salary history from the hiring determination  
          and requiring employers to be more transparent, this bill will  
          help ensure that employers will not be able to use a history of  
          low pay as justification for continuing to underpay women.   
          According to the author, it's time we put an end to this  
          prejudicial hiring practice and give women a better chance to  
          negotiate a fair deal. 


          Similarly, supporters of this bill argue that, "by creating a  
          less biased structure for negotiating pay during the hiring  
          process, this bill 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."


          A coalition of employers, including the California Chamber of  
          Commerce, opposes this measure.  They state that basing  
          compensation solely on an applicant's prior salary is already a  








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          questionable business practice.  Opponents also argue that Labor  
          Code Section 1197.5 requires an employer to provide equal pay  
          for substantially similar work, which Senator Jackson  
          strengthened last year through SB 358 (Jackson), Chapter 546,  
          Statutes of 2015, which was signed into law.  Senator Jackson,  
          numerous media outlets and various articles have referenced SB  
          358 as the "toughest equal pay law in the nation."  SB 358 went  
          into effect on January 1, 2016.  Adequate time has not been  
          given to assess how implementation of SB 358 is faring.   
          Opponents also argue that this bill will be subject to increased  
          litigation because a simple inquiry into an applicant's salary  
          history or prior compensation when there is no ultimate harm to  
          the applicant/employee would create an opportunity for  
          litigation.


          AB 1017 (Campos) from 2015 was substantially similar to this  
          bill.  AB 1017 was vetoed by Governor Brown. 




          Analysis Prepared by:                                             
                          Taylor Jackson / L. & E. / (916) 319-2091  FN:  
          0003091