BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1890|
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THIRD READING
Bill No: AB 1890
Author: Dodd (D), et al.
Amended: 8/17/16 in Senate
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE: 8-2, 6/28/16
AYES: Hall, Block, Glazer, Hernandez, Hill, Hueso, Lara,
McGuire
NOES: Berryhill, Gaines
NO VOTE RECORDED: Bates, Galgiani, Vidak
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 55-23, 6/2/16 - See last page for vote
SUBJECT: Discrimination: equal pay: state contracting
SOURCE: Author
DIGEST: This bill enacts the Equal Pay for Equal Work Act of
2016 and requires an employer with a state contract that amounts
to $50,000 or more that either is required by federal
regulations to submit a federal nondiscrimination report, as
specified, or has 100 or more employees in the state 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.
Senate Floor Amendments of 8/17/16 clarify that employers with a
state contract that are required to submit a federal
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Page 2
nondiscrimination report, as specified, may submit a copy of
that report to the DFEH and be deemed in compliance with the
requirements of this bill.
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
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 any employer with a state contract that amounts to
$50,000 or more that either is required by federal regulations
to submit a federal nondiscrimination report, as specified, or
has 100 or more employees in the state 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 that is described in item
#1 above to submit a nondiscrimination program and if DFEH so
requires, the employer must comply with the requirements for
employers described in item #1 above.
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.
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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
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
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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
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.
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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.
Related/Prior Legislation
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 by
Governor)
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
According to Senate Appropriations Committee, DFEH
administrative costs of approximately $350,000 annually to
collect and store specified workforce data on state contractors,
and to process additional Public Records Act requests for that
data. (General Fund)
Additionally, major DFEH General Fund cost pressures, to the
extent the department exercises the authority to require
approval and certification of contractors' nondiscrimination
programs. DFEH would require substantial staff augmentations to
support those efforts. There could be additional information
technology costs of approximately $1 million one-time and
$160,000 ongoing, if DFEH were to collect and sort data on
contractors' workers by job category, race/national origin,
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gender, wages, and hours worked. These cost pressures could be
substantially higher if DFEH further extended the requirements
of the bill to subcontractors and to smaller businesses.
SUPPORT: (Verified 8/18/16)
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 Professional Firefighters
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
Utility Workers Union of America, AFL-CIO
Women in Non Traditional Employment Roles
OPPOSITION: (Verified 8/18/16)
California Association of Health Underwriters
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
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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 certain provisions that treat signatory and non-signatory
construction contractors differently. Also, opponents believe
AB 1890 "goes further than federal requirements and adds new
paperwork and reporting mandates on a broader group of
employers."
ASSEMBLY FLOOR: 55-23, 6/2/16
AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu,
Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier,
Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez,
Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin,
Jones-Sawyer, Levine, Linder, Lopez, Low, McCarty, Medina,
Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams,
Wood, Rendon
NOES: Achadjian, Travis Allen, Baker, Brough, Dahle, Gallagher,
Grove, Hadley, Harper, Jones, Kim, Lackey, Maienschein,
Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson,
Steinorth, Wagner, Waldron, Wilk
NO VOTE RECORDED: Bigelow, Beth Gaines
Prepared by:Arthur Terzakis / G.O. / (916) 651-1530
8/18/16 16:50:27
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