Senate Bill No. 358

Introduced by Senator Jackson

February 24, 2015

An act to amend Sections 232, 232.5, and 1197.5 of the Labor Code, relating to private employment.

LEGISLATIVE COUNSEL’S DIGEST

SB 358, as introduced, Jackson. Conditions of employment: wages and working conditions: gender wage differential.

Existing law regulates the payment of compensation to employees by employers and prohibits an employer from conditioning employment on requiring an employee to refrain from disclosing the amount of his or her wages, signing a waiver of the right to disclose the amount of those wages, or discharging an employee for making such a disclosure. Existing law establishes similar prohibitions in connection with disclosing an employer’s workplace conditions.

This bill would extend the prohibitions described above to discussions and inquiries regarding the wages of an employee, the wages of other employees, and workplace conditions. The bill would require an employer to post these provisions in a conspicuous location frequented by employees during the hours of the workday.

Existing law generally 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. Existing law establishes exceptions to that 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. Existing law 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 as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions.

This bill would revise that prohibition to eliminate the requirement that the pay differential be within the same establishment, and would replace the terms “equal” work “and” equal skill, effort, and responsibility “with” comparable work “and” comparable skill, effort, and responsibility. The bill would revise and recast the exceptions to require the employer to affirmatively demonstrate that a pay differential is based upon one or more specified factors, including seniority system, a merit system, a system that measures earnings by quantity or quality of production, or that work is performed at different geographic locations, on different shifts, or at different times of day. The bill would also require the employer to demonstrate that each factor relied upon is applied reasonably, and that the one or more factors relied upon account for the entire differential. By changing the definition of a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares the following:

(a) In 2013, the gender wage gap in California stood at 16 cents
on the dollar. A woman working full-time year-round earned an
average of 84 cents to every dollar a man earned. This wage gap
extends across almost all occupations reporting in California. This
gap is far worse for women of color; Latina women in California
make only 44 cents for every dollar a white male makes, the biggest
gap for Latina women in the nation.

(b) While the state’s overall wage gap is slightly lower than the
national average of 77 cents to the dollar, the persistent disparity
in earnings still has a significant impact on the economic security
and welfare of millions of working women and their families.
Collectively, women working full-time in California lose
approximately $36,971,379,159 each year due to the gender wage
gap. The wage gap contributes to the higher statewide poverty rate
among women, which stands at 18 percent, compared to
approximately 15 percent for men, and the poverty rate is even
higher for women of color and single women living with children.

(c) California has prohibited gender-based pay discrimination
since 1949. Section 1197.5 of the Labor Code was enacted to
redress the segregation of women into historically undervalued
occupations, but it has evolved over the last four decades so that
it is now virtually identical to the federal Equal Pay Act of 1963
(29 U.S.C. Sec. 206(d)). However, the state provisions are rarely
utilized because many loopholes make it nearly impossible to
establish a successful claim.

(d) Pay secrecy also contributes to the gender pay gap, because
women cannot challenge pay discrimination that they do not know
exists. Although California law prohibits employers from banning
pay disclosures and retaliating against employees for engaging in
this activity, in practice many employees are unaware of these
protections and others are afraid to exercise these rights due to
potential retaliation.

(e) To eliminate the gender wage gap in California, the state’s
equal pay provisions and laws regarding pay disclosures must be
improved.

SEC. 2.  

Section 232 of the Labor Code is amended to read:

232.  

begin delete No end delete begin insert An end insert employer begin delete may end delete begin insert shall not end insert do any of the following:

(a)  begin delete Require, as a condition of employment, that end delete begin insert Bar end insert an employee
begin delete refrain end delete from begin delete disclosing end delete begin insert disclosing, discussing, or inquiring about end insert
the amount of his or her begin delete wages. end delete begin insert wages, or from inquiring about
or discussing the wages of other employees. end insert

(b) Require an employee to sign a waiver or other document
that purports to deny the employee the right to begin delete disclose end delete begin insert disclose,
inquire about, or discuss end insert the amount of his or her begin delete wages. end delete begin insert wages,
or to inquire about or discuss the wages of other employees. end insert

(c) Discharge, begin delete formally end delete discipline, or otherwise discriminate
against an employee who begin delete discloses end delete begin insert discloses, discusses, or inquires
about end insert the amount of his or her begin delete wages. end delete begin insert wages, or who discusses or
inquires about end insert begin insert the wages of other employees. end insert

begin insert

(d) An employer shall post a copy of this section and keep it
posted in a conspicuous location frequented by employees during
the hours of the workday.

end insert

SEC. 3.  

Section 232.5 of the Labor Code is amended to read:

232.5.  

begin delete No end delete begin insert An end insert employer begin delete may end delete begin insert shall not end insert do any of the following:

(a)  begin delete Require, as a condition of employment, that end delete begin insert Bar end insert an employee
begin delete refrain end delete from begin delete disclosing information about end delete begin insert disclosing, discussing,
or inquiring about end insert the employer’s working conditions.

(b) Require an employee to sign a waiver or other document
that purports to deny the employee the right to begin delete disclose end delete begin insert disclose,
discuss, or inquire about end insert information about the employer’s working
conditions.

(c) Discharge, begin delete formally end delete discipline, or otherwise discriminate
against an employee who begin delete discloses end delete begin insert discloses, discusses, or inquires
about end insert information about the employer’s working conditions.

(d) This section is not intended to permit an employee to disclose
proprietary information, trade secret information, or information
that is otherwise subject to a legal privilege without the consent
of his or her employer.

begin insert

(e)  An employer shall post a copy of this section and keep it
posted in a conspicuous location frequented by employees during
the hours of the workday.

end insert

SEC. 4.  

Section 1197.5 of the Labor Code is amended to read:

1197.5.  

(a)  begin delete No end delete begin insert An end insert employer shall begin insert not end insert pay any begin delete individual in
the employer’s employ end delete begin insert employee end insert at wage rates less than the rates
paid to employees of the opposite sex begin delete in the same establishment end delete
for begin delete equal end delete begin insert comparable end insert work on jobs the performance of which
requires begin delete equal end delete begin insert comparable end insert skill, effort, and responsibility, and
which are performed under similar working conditions, except
where begin delete 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. end delete begin insert the employer demonstrates: end insert

begin insert

(1) The pay differential is based upon one or more of the
following factors:

end insert begin insert

(A) A seniority system.

end insert begin insert

(B) A merit system.

end insert begin insert

(C) A system that measures earnings by quantity or quality of
production.

end insert begin insert

(D) Work is performed at different geographic locations.

end insert begin insert

(E) Work is performed on different shifts or at different times
of day.

end insert begin insert

(2) Each factor relied upon is applied reasonably.

end insert begin insert

(3) The one or more factors relied upon account for the entire
differential.

end insert

(b) Any employer who violates subdivision (a) is liable to the
employee affected in the amount of the wages, and interest thereon,
of which the employee is deprived by reason of the violation, and
in an additional equal amount as liquidated damages.

(c) The begin delete provisions of end delete begin insert Division of Labor Standards Enforcement
shall administer and enforce end insert this begin delete section shall be administered and
enforced by the Division of Labor Standards Enforcement. end delete begin insert section. end insert
If the division finds that an employer has violated this section, it
may supervise the payment of wages and interest found to be due
and unpaid to employees under subdivision (a). Acceptance of
payment in full made by an employer and approved by the division
shall constitute a waiver on the part of the employee of the
employee’s cause of action under subdivision (g).

(d) Every employer shall maintain records of the wages and
wage rates, job classifications, and other terms and conditions of
employment of the persons employed by the employer. All of the
records shall be kept on file for a period of two years.

(e) Any employee may file a complaint with the division that
the wages paid are less than the wages to which the employee is
entitled under subdivision (a). begin delete These complaints end delete begin insert The complaint end insert
shall be investigated as provided in subdivision (b) of Section 98.7.
The begin insert division shall keep confidential the end insert name of any employee
who submits to the division a complaint regarding an alleged
violation of subdivision (a) begin delete shall be kept confidential by the
division end delete until begin insert the division establishes the end insert validity of the begin delete complaint
is established by the division, or end delete begin insert complaint, end insert unless the begin insert division
must abridge end insert confidentiality begin delete must be abridged by the division in
order end delete to investigate the complaint. The name of the complaining
employee shall remain confidential if the complaint is withdrawn
before the confidentiality is abridged by the division. The division
shall take all proceedings necessary to enforce the payment of any
sums found to be due and unpaid to these employees.

(f) The department or division may commence and prosecute,
unless otherwise requested by the employee or affected group of
employees, a civil action on behalf of the employee and on behalf
of a similarly affected group of employees to recover unpaid wages
and liquidated damages under subdivision (a), and in addition shall
be entitled to recover costs of suit. The consent of any employee
to the bringing of any action shall constitute a waiver on the part
of the employee of the employee’s cause of action under
subdivision (g) unless the action is dismissed without prejudice
by the department or the division, except that the employee may
intervene in the suit or may initiate independent action if the suit
has not been determined within 180 days from the date of the filing
of the complaint.

(g) Any employee receiving less than the wage to which the
employee is entitled under this section may recover in a civil action
the balance of the wages, including interest thereon, and an equal
amount as liquidated damages, together with the costs of the suit
and reasonable attorney’s fees, notwithstanding any agreement to
work for a lesser wage.

(h) A civil action to recover wages under subdivision (a) may
be commenced no later than two years after the cause of action
occurs, except that a cause of action arising out of a willful
violation may be commenced no later than three years after the
cause of action occurs.

(i) If an employee recovers amounts due the employee under
subdivision (b), and also files a complaint or brings an action under
subdivision (d) of Section 206 of Title 29 of the United States
Code which results in an additional recovery under federal law for
the same violation, the employee shall return to the employer the
amounts recovered under subdivision (b), or the amounts recovered
under federal law, whichever is less.

SEC. 5.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.