BILL NUMBER: SB 358 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 5, 2015
AMENDED IN SENATE APRIL 6, 2015
INTRODUCED BY Senator Jackson
( Coauthors: Senators Hall
and Leno )
( Coauthor: Assembly Member
Gonzalez Coauthors: Assembly
Members Chu, Eduardo Garcia,
Gonzalez, and Rodriguez )
FEBRUARY 24, 2015
An act to amend Section 1197.5 of the Labor Code, relating to
private employment.
LEGISLATIVE COUNSEL'S DIGEST
SB 358, as amended, Jackson. Conditions of employment: 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 discriminating against an employee for making such a
disclosure.
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" with
"work of a comparable character" "equal skill, effort, and
responsibility" "comparable skill, effort, and responsibility."
instead would prohibit an employer from paying any of
its employees at wage rates less than those paid to
employees of the opposite sex for substantially similar work, when
viewed as a composite of skill, effort, and responsibility, as
specified. 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 a
seniority system, a merit system, a system that measures earnings by
quantity or quality of production, cost-of-living
differences due to geographic location, or a bona fide
factor that is not based on or derived from a sex-based differential
in compensation and is consistent with a business necessity, as
defined. 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. The
bill would prohibit an employer from discharging, or in any manner
discriminating or retaliating against, any employee by reason of any
action taken by the employee to invoke or assist in any manner the
enforcement of these provisions. The bill would authorize an
employee who has been discharged or discriminated or retaliated
against, in the terms and conditions of his or her employment because
the employee engaged in any conduct delineated in these provisions,
to recover in a civil action reinstatement and reimbursement for lost
wages and work benefits caused by the acts of the
employer, including interest thereon, as well as appropriate
equitable relief. The bill would prohibit an employer from
prohibiting an employee from disclosing the employee's own wages,
discussing the wages of others, or inquiring about another employee's
wages if the purpose of the disclosure, discussion, or inquiry is to
invoke or enforce the rights granted by these provisions. The
bill would also increase the duration of employer recordkeeping
requirements from 2 years to 3 years. 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 2014, 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 78 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 $33,650,294,544 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 1197.5 of the Labor Code is amended to read:
1197.5. (a) An employer shall not pay any employee
of its employees at wage rates less than the
rates paid to employees of the opposite sex for work of a
comparable character on jobs the performance of which requires
comparable substantially similar work, when viewed as
a composite of skill, effort, and responsibility, and
that are performed under similar working conditions, except
where the employer demonstrates:
(1) The pay differential is based upon one or more of the
following factors:
(A) A seniority system.
(B) A merit system.
(C) A system that measures earnings by quantity or quality of
production.
(D) Cost-of-living differences due to geographic location.
(E)
(D) A bona fide factor that is not based on or derived
from a sex-based differential in compensation and is consistent with
a business necessity, such as a difference in education, training, or
experience that is job related with respect to the position in
question. For purposes of this subparagraph, "business necessity"
means an overriding legitimate business purpose such that the factor
relied upon is necessary to the safe and efficient operation
of the business, that the factor relied upon effectively
fulfills the business purpose it is supposed to serve, and
there is no alternative practice to the factor relied upon that would
accomplish the business purpose. no alternative
employment practice would serve the same legitimate business purpose
without producing a compensation differential.
(2) Each factor relied upon is applied reasonably.
(3) The one or more factors relied upon account for the entire
pay differential.
(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 an
additional equal amount as liquidated damages.
(c) The Division of Labor Standards Enforcement shall administer
and enforce this section. 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
three 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). (a) or that the
employer is in violation of subdivision (j). The complaint
shall be investigated as provided in subdivision (b) of Section 98.7.
The division shall keep confidential the name of any employee who
submits to the division a complaint regarding an alleged violation of
subdivision (a) or (j) until the division establishes the
validity of the complaint, unless the division must abridge
confidentiality 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.
(j) (1) An employer shall not discharge, or
in any manner discriminate or retaliate against, any employee by
reason of any action taken by the employee to invoke or assist in any
manner the enforcement of this section. An employer shall not
prohibit an employee from disclosing the employee's own wages,
discussing the wages of others, or inquiring about another employee's
wages if the purpose of the disclosure, discussion, or inquiry is to
invoke or enforce the rights granted by this section. Nothing in
this section creates an obligation to disclose wages.
(k) As used in subdivision (a), "work of a comparable character"
means work, the requirements of which, are substantially equivalent
when viewed as a composite of level of skills, effort,
responsibility, and working conditions.
(2) Any employee who has been discharged, discriminated or
retaliated against, in the terms and conditions of his or her
employment because the employee engaged in any conduct delineated in
this section may recover in a civil action reinstatement and
reimbursement for lost wages and work benefits caused by the acts of
the employer, including interest thereon, as well as appropriate
equitable relief.
(3) A civil action to recover wages under this subdivision may be
commenced no later than one year after the cause of action occurs.
SEC. 3. 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.