BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                              Senator Isadore Hall, III
                                        Chair
                                2015 - 2016  Regular 

          Bill No:           AB 1890          Hearing Date:    6/28/2016
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          |Author:    |Dodd                                                 |
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          |Version:   |6/21/2016    Amended                                 |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Arthur Terzakis                                      |
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          SUBJECT: Discrimination:  equal pay:  state contracting


          DIGEST:    This bill enacts the Equal Pay for Equal Work Act of  
          2016 and requires state contractors with 100 or more employees  
          in the state and a contract that amounts to $50,000 or more to  
          submit an annual report to the Department of Fair Employment and  
          Housing (DFEH) that includes summary data on the compensation  
          paid to employees, sorted by gender and race, and a description  
          of the employer's policies designed to ensure pay equity and  
          prevent unlawful discrimination. 
            

          ANALYSIS:
          
          Existing law:
          
          1)Authorizes state agencies to enter into contracts for the  
            acquisition of goods or services upon approval by the  
            Department of General Services and establishes rules governing  
            the awarding of contracts by state agencies, including general  
            requirements for competitive bidding on contracts for the  
            acquisition of goods or services.

          2)Subjects an employer, who is, or wishes to become, a  
            contractor with the state for public works, or for goods or  
            services, to various nondiscrimination requirements. 

          3)Provides that prior to becoming a contractor or subcontractor  







          AB 1890 (Dodd)                                      Page 2 of ?
          
          
            with the state, an employer may be required to submit a  
            nondiscrimination program to the DFEH for approval and  
            certification and also may be required to submit periodic  
            reports of its compliance with that program.

          This bill:

          1)Requires an employer with 100 or more employees in the state  
            and a contract with the state that amounts to $50,000 or more  
            to submit a nondiscrimination program to the DFEH and periodic  
            reports, no more than annually, of its compliance with that  
            program.

          2)Permits DFEH to require an employer with fewer than 100  
            employees in the state or a contract with the state that  
            amounts to less than $50,000 to submit a nondiscrimination  
            program and if DFEH so requires, the employer must comply with  
            the requirements for employers with 100 or more employees in  
            the state or a contract with the state that amounts to $50,000  
            or more.

          3)Requires DFEH to define an "employee" for purposes of this  
            bill and provides that DFEH may require approval and  
            certification of a nondiscrimination program.

          4)Makes it explicit that this bill does not negate existing  
            exemptions created by DFEH through the exercise of its  
            regulatory authority or to otherwise require DFEH to  
            reinterpret the validity of an exemption as a result of these  
            changes.

          5)Stipulates that a nondiscrimination program must include  
            policies and procedures designed to ensure equal employment  
            opportunities for all applicants and employees, a description  
            of employment selection procedures, and employee compensation  
            data, as follows:

             a)   The total number of workers in a specific job category  
               identified by worker, race or national origin, and sex;

             b)   Total wages required to be reported on Internal Revenue  
               Service Form W-2 for all workers within a specific job  
               category identified by worker, race or national origin, and  
               sex; and









          AB 1890 (Dodd)                                      Page 3 of ?
          
          
             c)   The total hours worked on an annual basis for all  
               workers within a specific job category identified by  
               worker, race or national origin, and sex.  (Exempt  
               employees shall be presumed to work 40 hours per week for  
               purposes of this reporting requirement.)

          6)Stipulates that an employee in the construction industry  
            covered by a valid collective bargaining agreement that  
            expressly provides for the wages, hours of work, and working  
            conditions of employees, premium wage rates for all overtime  
            worked, and regular hourly pay of not less than 30% above the  
            state minimum wage rate shall be excluded from calculation of  
            the employer's total number of employees. 

          7)Specifies that a contractor or subcontractor may submit a  
            certain report that is   subject to review by the United  
            States Equal Employment Opportunity Commission with DFEH,  
            instead of any nondiscrimination program required by this  
            bill. 

          8)Makes various findings and declarations relative to the fact  
            that disparities in pay for women have numerous negative  
            impacts and states legislative intent to promote pay equity  
            and nondiscrimination and to obtain better data on pay equity  
            to more wholly address the problem.  

          Background

          Purpose of AB 1890.  According to the author's office, this bill  
          seeks to compile data on gender wage inequity among state  
          contractors, as specified, and ensure state contractors have  
          policies in place for preventing unlawful discrimination.  The  
          author's office notes that union construction contractors who  
          are subject to a collective bargaining agreement will be exempt  
          from the requirements of this bill due to the fact that they  
          have no say on what gender or race of employees they will  
          receive from the hiring hall.  

          The author's office references data from the United States  
          Census Bureau which found full-time working women, on average,  
          over the last decade, have continued to earn only 79 cents for  
          every dollar that a man earns.  In 2015, that wage disparity  
          amounted to an average annual wage gap of $10,762 between  
          full-time working men and full-time working women - the  
          disparity is even greater for women of color, with African  








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          American women earning only an average of 60 cents of what  
          white, non-Hispanic male workers earn, and Latinas averaged just  
          55 cents for every dollar paid to white, non-Hispanic men in the  
          same year. 

          The author's office points out that on August 6, 2014, the U.S.  
          Department of Labor's Office of Federal Contract Compliance  
          Programs issued a Notice of Proposed Rulemaking requiring  
          federal contractors and subcontractors to submit data on  
          employee compensation.  Under terms of the proposed rule,  
          companies that have more than 100 employees and hold federal  
          contracts or subcontracts worth $50,000 or more for at least 30  
          days would have to submit an annual Equal Pay Report on employee  
          compensation to the Office of Federal Contract Compliance  
          Programs.  Information would include total number of workers  
          within a specific job category, total W-2 wages for all workers  
          on the job and total hours worked, broken down by race,  
          ethnicity and sex. 

          The proposal fulfills the Secretary of Labor's responsibility  
          under President Obama's Presidential Memorandum, "Advancing Pay  
          Equality Through Compensation Data Collection," to develop a  
          rule requiring federal contractors and subcontractors to submit  
          to the Department of Labor summary data on the compensation paid  
          to their employees, including data by sex and race.   

          According to the author's office, this bill builds on the same  
          goal as President Obama's actions from 2014 through the  
          compilation of data on gender wage inequity among state  
          contractors and will ensure state contractors have policies for  
          preventing unlawful discrimination.

          Staff comments.  This bill is similar to AB 1354 (Dodd of 2015)  
          which was vetoed by the Governor.   The Governor's veto message  
          stated, "Currently, the department requires all state  
          contractors to develop and implement a nondiscrimination program  
          meeting certain requirements and also certify that they have  
          done so, under penalty of perjury.  Furthermore, the department  
          has existing authority to require a contractor to submit this  
          information prior to contracting with the state, if  
          noncompliance is suspected.  In light of these factors, I do not  
          believe this bill is necessary at this time." 

          Prior/Related Legislation
          








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          AB 1354 (Dodd, 2015) would have enacted the Equal Pay for Equal  
          Work Act of 2015 and require an employer with 100 or more  
          employees in the state and a contract of 30 days or more, prior  
          to becoming a contractor or subcontractor with the state, to  
          submit a nondiscrimination program to the DFEH and to submit an  
          annual report of its compliance with that program.  (Vetoed)

          AB 1960 (Dickinson, Chapter 861, Statutes of 2012) required the  
          Department of General Services to report on business  
          participation levels by lesbian, gay, bisexual, and transgender  
          (LGBT) owners in contracts, as specified, beginning January 1,  
          2013.

          AB 17 (Kehoe, Chapter 752, Statutes of 2003), among other  
          things, prohibited a state agency from entering into a contract  
          for the acquisition of goods or services in the amount of  
          $100,000 or more with a contractor who, in the provision of  
          benefits, discriminates between employees with spouses and  
          employees with domestic partners, or discriminates between the  
          domestic partners and spouses of those employees, except under  
          specified circumstances.

          FISCAL EFFECT:                 Appropriation:  No    Fiscal  
          Com.:             Yes          Local:          No


            SUPPORT:  

          American Association of University Women
          American Civil Liberties Union of California
          California Chapters of the National Electric Contractors  
          Association
          California Conference Board of the Amalgamated Transit Union
          California Employment Lawyers Association
          California Labor Federation
          California Legislative Conference of the Plumbing, Heating and  
          Piping Industry
          California School Employees Association, AFL-CIO
          California Teamsters Public Affairs Council
          Engineers & Scientists of California, IFPTE Local 20, AFL-CIO
          International Longshore and Warehouse Union
          National Association of Social Workers, California Chapter
          Professional and Technical Engineers, IFPTE Local 21, AFL-CIO
          UNITE-HERE, AFL-CIO
          United Contractors








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          Utility Workers Union of America, AFL-CIO

          OPPOSITION:

          Western Electrical Contractors Association

          ARGUMENTS IN SUPPORT:    Proponents note that "the existing  
          nondiscrimination and compliance employment program established  
          in Government Code Section 12990 is a set of specific and  
          result-oriented procedures to which a contractor or  
          subcontractor commits itself to ensure employment opportunity  
          for all employees or applicants for employment.  This bill would  
          build upon the existing nondiscrimination reporting program to  
          require state contractors to provide summary data on employee  
          compensation.  This bill aims to achieve the same goal as the  
          2014 Presidential Memorandum - to help employers take proactive  
          measures to ensure fair pay for their employees.  Simply  
          compiling the data will prompt some businesses to make necessary  
          changes." 

          ARGUMENTS IN OPPOSITION:    Opponents have expressed concern  
          with Section 12990 (b) (1) (B) found on page 4, lines 24-31, and  
          claim that this section treats signatory and non-signatory  
          construction contractors differently.