BILL ANALYSIS                                                                                                                                                                                                    Ó





          SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
                             Senator Tony Mendoza, Chair
                                2015 - 2016  Regular 

          Bill No:               AB 1676      Hearing Date:     June 22,  
          2016
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          |Author:    |Campos                                               |
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          |Version:   |June 15, 2016                                        |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Gideon L. Baum                                       |
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                      Subject:  Employers:  salary information


          KEY ISSUE
          
          Should the Legislature clarify that prior salary cannot be used  
          to justify any disparity in compensation between men and women?

          ANALYSIS
          
           Existing law:

              1)   Bars an employer from requiring an employee to refrain  
               from disclosing the amount of his or her wages, requiring  
               an employee to sign a waiver or other document that denies  
               the employee the right to disclose the amount of his or her  
               wages or discharge, or formally disciplining, or otherwise  
               discriminating against an employee who discloses the amount  
               of his or her wages. (Labor Code §232)

             2)   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. (Labor Code §1197.5)








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             3)   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. (Labor Code §1197.5)

             4)   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 sex, or who reduces the wages of any  
               employee in order to comply with wage protections for an  
               employee of the opposite sex.  (Labor Code §1199.5)
           
          This bill:
          
              1)   Clarifies that prior salary, by itself, must not justify  
               any disparity in compensation between workers of the  
               opposite sex;

             2)   Makes findings and declarations on the wage differential  
               between men and women, recent case law, and that this bill  
               is a codification of existing law.


          COMMENTS
          
          1.  Need for this bill?

            The author states the following:

            "On average, California women who are employed full time lose  
            a total of approximately $37.7 billion every year due to the  
            wage gap. These lost wages mean families have less money to  
            spend on goods and services that help drive economic growth?  
            [M]others are the primary or sole breadwinners in nearly 40  
            percent of families, and married mothers are the primary or  
            co-breadwinners in nearly two-thirds of families. That means  
            women's wages are key to their families' ability to make ends  
            meet and get ahead. 

            The pay gap begins early in women's careers. According to a  
            study by the American Association of University Women, women  
            one year out of college, working full time, were paid on  







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            average just 82 percent of what their male counterparts make.  
            This number shows that there is still a significant wage gap  
            when accounting for age, education and family  
            responsibilities.

            According to a recent report from the Institute for Women's  
            Policy Research, the gender wage gap in the United States will  
            not close until 2058 if progress continues at its current  
            rate. But perhaps our slow rate of progress is due at least in  
            part because we have allowed employers to preserve historical  
            inequities.

            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. For  
            example, women in Silicon Valley with advanced degrees are  
            making more than 70 percent less than men with the same  
            degrees. And California has one of the largest wage gaps for  
            African American and Hispanic women, who make just 64 and 44  
            cents, respectively, for every $1 a white man makes. These  
            depressed salaries only serve to devalue a woman's worth and  
            make it harder for her to negotiate better pay."

            AB 1676 addresses the pay gap by making findings and  
            declarations and clearly stating that prior compensation  
            cannot be used to justify any disparity in compensation.


          2.  Proponent Arguments  :
            
            Proponents argue AB 1676 is an important measure to continue  
            previous legislative efforts to bridge the wage gap between  
            male and female workers. Specifically, proponents note that,  
            last year, the Legislature passed SB 358, which requires that  
            men and women doing substantially similar work under similar  
            working conditions be paid equally, barring certain factors.  
            The practice of paying someone solely based on their prior  
            salary was not specifically addressed, recent administrative  
            court decisions have made clear this is discriminatory and  
            locks in a low level of pay for many women. AB 1676 addresses  
            this by making explicit and clear that paying someone less on  
            the basis of a prior salary is discriminatory. 








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          3.  Opponent Arguments  :

            None on file.


          4.  Double Referral:  

            This bill has been double-referred and, if approved by this  
            committee, it will be sent to the Senate Judiciary Committee  
            for a hearing.


          5.  Prior Legislation  :

            SB 358 (Jackson), Chapter 546, Statutes of 2015, requires that  
            men and women doing substantially similar work under similar  
            working conditions be paid equally, unless the employer can  
            demonstrate that the pay differential is based on certain  
            enumerated factors.


          SUPPORT
          
          California Employment Lawyers Association (Sponsor)
          Alliance of Californians for Community Empowerment
          American Association of University Women
          California Asset Building Coalition
          California Child Care Resource and Referral Network
          California Domestic Workers Coalition
          California Employment Lawyers Association
          California Latinas for Reproductive Justice
          California Partnership
          California Women's Law Center
          California Work and Family Coalition
          Child Care Law Center
          Courage Campaign
          Equal Rights Advocates
          Legal Aid Society Employment Law Center
          Mujeres Unidas y Activas
          National Association of Social Workers-California Chapter
          National Council of Jewish Women
          Parent Voices
          Raising California Together
          Santa Barbara Women's Political Committee
          Santa Clara County board of Supervisors







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          The Center for Popular Democracy
          The Opportunity Institute
          The Women's Foundation of California
          Tradeswomen, Inc.
          Voices for Progress
          Western Center on Law and Poverty
          9 to 5 California
          
          OPPOSITION
                                          
          None received.
                                          
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