BILL ANALYSIS                                                                                                                                                                                                    Ó





                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                            2015 - 2016  Regular  Session


          SB 358 (Jackson)
          Version: April 6, 2015
          Hearing Date:  April 28, 2015
          Fiscal: Yes
          Urgency: No
          TMW
                    

                                        SUBJECT
                                           
                 Conditions of employment:  gender wage differential

                                      DESCRIPTION  

          This bill would revise the California Equal Pay Act to prohibit  
          an employer from paying any of its employees at wage rates less  
          than rates paid to employees of the opposite sex for  
          substantially similar work, when viewed as a composite of skill,  
          effort, and responsibility, and performed under similar working  
          conditions.  This bill would revise the "bona fide factor"  
          exception in existing law to require the employer to prove:  (1)  
          the factor is not based on or derived from a sex-based  
          differential in compensation and is consistent with a business  
          necessity, as specified, such as a difference in education,  
          training, or experience that is job related with respect to the  
          position in question; (2) each factor relied upon is applied  
          reasonably; and (3) the factors relied upon account for the  
          entire pay differential.  This bill would also prohibit  
          discrimination or retaliation against an employee who inquires  
          about the wages paid to other employees.

          (This analysis reflects author's amendments to be offered in  
          Committee.)

                                      BACKGROUND  

          The California Equal Pay Act (Act) was first established in 1949  
          and requires that men and women in the same workplace be given  
          equal pay for equal work.  Although the Act requires  
          gender-neutral pay practices, studies show that women are still  








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          paid less than their male counterparts, resulting in what is  
          referred to as the "gender wage gap."  The term "gender wage  
          gap" refers to the difference in earnings between male and  
          female workers.  

          Each year, the United States Census Bureau and the United States  
          Bureau of Labor Statistics provide an estimate of the wage gap  
          using annual earnings based on the Current Population Survey  
          Annual Social and Economic Supplement data.  Although the gender  
          wage gap has narrowed since the 1960s, after the passage of the  
          federal Equal Pay Act of 1963 (EPA), female workers nationwide  
          earned 78 percent of what male workers were paid as of 2013.   
          (DeNavas-Walt, Carmen, and Proctor, Income, Poverty, and Health  
          Insurance Coverage in the United States: 2013 (2014) U.S. Census  
          Bureau, Current Population Reports (Sept. 2014)  
           [as of  
          Apr. 23, 2014) p. 10.)  This translates into a wage gap of 22  
          cents.  In 2014, the gender wage gap in California stood at 16  
          cents on the dollar.  (AAUW, The Gender Pay Gap:  California  
          (Sept. 2014)  [as of Apr. 23, 2015].)

          Recent federal legislation has been attempted to eliminate the  
          national gender wage gap.  The Pay Check Fairness Act (H.R.  
          377/S. 844, 113th Congress) would have increased penalties for  
          employers who pay different wages to men and women for "equal  
          work" and would add programs for training, research, technical  
          assistance, and pay equity employer recognition awards.  Those  
          bills, among other things, would have  provided safeguards to  
          protect employees from retaliation for making inquiries or  
          disclosures concerning employee wages.  Those bills would also  
          have established more restrictive standards by requiring an  
          employer to establish that a factor used by the employer to pay  
          an employee more than an employee of the opposite sex was job  
          related, consistent with business necessity, and not derived  
          from a sex-based differential in compensation, and that the  
          employer's purpose could not be accomplished by less  
          discriminatory alternative means.

          The Fair Pay Act (H.R. 438/S. 168, 113th Congress) would have  
          expanded the scope of the EPA to include racial and ethnic  
          minority protection and narrowed the "factors other than sex"  
          upon which an employer could rely to justify a wage  
          differential.  Those bills would also have substituted  







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          "equivalent jobs" for an "equal" work standard.  Equivalent jobs  
          are those whose composite of skill, effort, responsibility, and  
          working conditions are equivalent in value (or worth to the  
          employer), even if the jobs are dissimilar.  Those prior federal  
          efforts failed to move out of their respective houses.  The Fair  
          Pay Act has been reintroduced this year as H.R. 1787 (Norton,  
          114th Congress) and is in its first committee.

          This bill seeks to eliminate the gender wage gap by prohibiting  
          pay differentials between men and women for substantially  
          similar work, as well as prohibiting retaliation against  
          employees who discuss their wages.

          This bill was heard by the Senate Labor and Industrial Relations  
          Committee on April 22, 2015, and passed out on a vote of 4-0.

                                CHANGES TO EXISTING LAW
           
           Existing law  , the California Equal Pay Act (Act), prohibits an  
          employer from paying any 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, except 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.  (Lab. Code Sec. 1197.5(a).)

           Existing law  provides that any employer who discriminates in the  
          payment of wages based on gender 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.  (Lab. Code  
          Sec. 1197.5(b).)

           Existing law  requires the Division of Labor Standards  
          Enforcement (DLSE) to administer and enforce the Act.  (Lab.  
          Code Sec. 1197.5(c).)

           Existing law  requires every employer to maintain records of the  
          wages and wage rates, job classifications, and other terms and  
          conditions of employment of the persons employed by the  
          employer, which must be kept on file for two years.  (Lab. Code  
          Sec. 1197.5(d).)







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          Existing law  authorizes any employee to file a complaint with  
          the DLSE that the wages paid are less than the wages to which  
          the employee is entitled under the Act, and the DLSE is required  
          to investigate these complaints, as specified. (Lab. Code Sec.  
          1197.5(e).)

           Existing law  authorizes the Department of Industrial Relations  
          (DIR) or the DLSE to 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 for violations of the Act, and are  
          entitled to recover costs of suit.  (Lab. Code Sec. 1197.5(f).)

           Existing law  provides that 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.   
          (Lab. Code Sec. 1197.5(g).)

           Existing law  provides that a civil action to recover wages under  
          the Act 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.  (Lab. Code Sec. 1197.5(h).)

           This bill  would prohibit an employer from paying any of its  
          employees at wage rates less than the rates paid to employees of  
          the opposite sex for substantially similar work, when viewed as  
          a composite of skill, effort, and responsibility, and performed  
          under similar working conditions, except where the employer  
          demonstrates:
           the pay differential is based upon one or more of the  
            following factors:
             o    a seniority system;
             o    a merit system;
             o    a system that measures earnings by quantity or quality  
               of production; or
             o    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, such as  
               a difference in education, training, or experience that  







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               is job related with respect to the position in question;
           each factor relied upon is applied reasonably; and
           the one or more factors relied upon account for the entire  
            pay differential.

           This bill  would extend the employer's record retention  
          requirement from two to three years.

           This 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 the Act.

           This bill  would make it unlawful for an employer to 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.

           This bill  would extend the existing enforcement mechanisms, as  
          specified, for wage discrimination under the Act to claims for  
          retaliation, and would provide a one-year statute of limitations  
          for retaliation claims.

           This bill  would authorize 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 the Act 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.

           This bill  would require a civil action to recover wages for  
          retaliation to be commenced no later than one-year after the  
          cause of action occurs.

           This bill  would make various related legislative findings and  
          declarations and make several technical, non-substantive  
          changes.

                                        COMMENT
           
          1.  Stated need for the bill  
          
          The author writes:







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            Working women in California continue to make less than men for  
            the same or substantially equal work.  The persistent  
            disparity in earnings across every occupation has a  
            significant impact on the welfare and economic security of  
            millions of women and their families in our state and  
            contributes to the higher poverty rate among women-especially  
            among women of color and single women living with children.   
            As a group, working women in California lose over $33 billion  
            each year due to the wage gap.  In 2013, the average woman in  
            California working full-time, year-round earned a median of 84  
            cents to every dollar earned by a man.  The problem is even  
            worse for women of color:  for example, African American and  
            Latina women working full-time in California make an average  
            of just 64 cents and 44 cents, respectively, for every dollar  
            earned by white men. California has the worst Latina gender  
            wage gap in the nation.

            SB 358 will strengthen the state's existing equal pay law by  
            eliminating loopholes that prevent effective enforcement and  
            empower employees to discuss pay without fear of retaliation.  
           
          Bet Tzedek Legal Services, in support, writes:  "We see on a  
          daily basis how the pay disparity affects women's everyday  
          lives.  Over 66 percent of our clients are low-income women,  
          often women of color and single women living with children.  In  
          our employment unit, we regularly represent women who are not  
          only paid below the minimum wage, but even within that setting  
          are paid far less than their underpaid male counterparts.  In  
          this low-wage context, any disparity in pay can be the  
          difference in whether or not they can make rent or buy  
          groceries.  For our clients, this issue is far from symbolic."

          2.  Burdens of proof  

          In order for a plaintiff employee to allege a wage gap claim,  
          the California Equal Pay Act (Act) requires the plaintiff to  
          prove that the employer is discriminating against the employee  
          based on gender because the employee is paying an employee of  
          the opposite sex wage rates that are higher than those paid to  
          the plaintiff for work performed in the same establishment for  
          equal work on jobs which require equal skill, effort, or  
          responsibility and which are performed under similar working  
          conditions.  The burden of proof then shifts to the defendant  
          employer to disprove wage discrimination by showing that the  







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          wages were paid 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.  This bill would revise those burdens of proof  
          in several significant ways, discussed further below.

              a.   Plaintiff employee's burden of proof
             
            This bill would clarify and update the burden of proof on the  
            plaintiff in several ways.  First, the bill would eliminate  
            the restriction that a plaintiff employee can only make a wage  
            gap claim based on the wages of workers in the same  
            establishment.  The California Employment Lawyers Association  
            (CELA) argues that the same establishment requirement in  
            existing law is outdated and contributes to the difficulty of  
            female workers to enforce California's equal pay laws.  As an  
            example, CELA states the "'same establishment" provision could  
            prevent a woman who works at a facility in Oakland, California  
            from comparing her pay to that of a man who works in the same  
            position and for the same company, but at a facility a mile  
            away in Berkeley."  This bill would allow that woman to  
            substantiate a wage gap claim by comparing her wages to those  
            paid to the men in the other facility.  Notably, this bill  
            would not alter the ability of an employer to provide a bona  
            fide factor for paying different wages based on the cost of  
            living if the claim was made comparing the wages in one  
            facility located in a rural community with a lower cost of  
            living against another facility located in an expensive city.

            Second, this bill would clarify the scope of a wage gap claim  
            by basing the job comparison on substantially similar work,  
            when viewed as a composite of skill, effort, and  
            responsibility.  Existing case law has developed in such a way  
            as to make it unclear whether "equal work" means exactly the  
            same job or substantially similar job.  Given the various ways  
            in which one person, who is performing primarily the same job  
            as another person of the opposite sex, could have one or two  
            additional duties that are secondary to his or her primary  
            duties, it is arguably appropriate to expand the scope of the  
            meaning of work.  An example of this issue is where a female  
            secretary's primary duties are to answer telephone calls, make  
            copies of documents, and transmit correspondence.  A male  
            assistant, however, answers telephone calls and transmits  
            documents, but he performs light filing tasks.  The plaintiff  
            in this case would not have to prove that the jobs were equal  







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            in order to be paid the same wages; rather, the plaintiff's  
            burden would be to show that the man and woman should be paid  
            the same wages because, when viewed as a composite of skill,  
            effort, and responsibility, they were performing substantially  
            similar jobs.  In this way, the bill would better accomplish  
            the intended equality goals of the Act by requiring the  
            plaintiff to prove the job performed by the plaintiff is  
            substantially similar to the job performed by another employee  
            of the opposite sex.

              b.   Defendant employer's burden of proof
             
            Existing law provides a defendant employer with four reasons  
            for which the employer may claim a legitimate wage disparity -  
            seniority, merit, a system which measures earnings by quantity  
            or quality of production, or a differential based on any bona  
            fide factor other than sex.  This bill would revise the  
            affirmative defenses that may be used by an employer to  
            disprove a plaintiff's claim of wage discrimination.

            Business & Professional Women of Nevada County, in support,  
            argue that "[c]learly, current laws have been ineffective in  
            closing the gender-based pay gap.  The [Act] has been in  
            effect for over 65 years, with the last revision in 1985.  Its  
            protections sorely need to be strengthened and updated, with  
            an eye to current employment and human resources practices.   
            Loopholes or outdated provisions that prevent effective  
            enforcement in today's labor markets must be recognized and  
            eliminated."  Proponents argue that the loopholes in the law  
            are contained within the "bona fide factor" affirmative  
            defense, which requires very little evidence of legitimacy.   
            Further, proponents contend that because the "bona fide factor  
            loophole" is so broad and ambiguous, most wage gap claims do  
            not survive summary judgment resulting in continued wage  
            disparity.  Proponents also argue that, because existing law  
            fails to require the employer to provide legitimate, business  
            related reasons for wage disparities, employers are not  
            encouraged to examine their pay practices, before a wage  
            discrimination claim is even necessary, to make sure they are  
            paying their workers equal wages.

            This bill seeks to close the bona fide factor loopholes by  
            requiring an employer, who claims the affirmative defense of  
            bona fide factor, to provide evidence that the bona fide  
            factor is not based on or derived from a sex-based  







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            differential in compensation and is consistent with a business  
            necessity.  The bill would provide that differences in  
            education, training, or experience would be legitimate bona  
            fide factors, in order to provide the court and parties to the  
            action guidance on acceptable, non-gender based factors.  This  
            bill would also provide a definition of "business necessity"  
            that is consistent with case law and the California Code of  
            Regulations, Title 2, Division 4.1, Subchapter 2, Article 1,  
            Section 11010.  

            Notably, Section 11010 provides that the bona fide factor "may  
            still be impermissible where it is shown that there is an  
            alternative practice that would accomplish the business  
            purpose equally well with a lesser discriminatory impact."   
            Although most case law attributes this proof of an alternative  
            practice to the plaintiff to rebut the defendant's affirmative  
            defense, that section does not assign responsibility for  
            making this claim.  This bill would take the alternative  
            practice provision and affirmatively assign it to the employer  
            to prove.  

            The author argues that requiring the employer to show that the  
            pay practice utilized by the employer does not result in a  
            discriminatory wage disparity accomplishes two important  
            purposes.  One, it would encourage employers to prospectively  
            examine their pay practices, prior to a plaintiff having to  
            make a wage claim, and determine whether the practice is  
            discriminatory based on gender.  An example of a current  
            problem with employer wage practices is the practice of basing  
            a starting salary on the employee's prior salary.  Proponents  
            argue that the job market is inherently gender-biased, as  
            proven by the continued wage gap, currently at 16 percent.   
            The author argues that employers should have control over the  
            way they determine wages, and the employers should be choosing  
            methods that do not have intentional or inherent wage  
            discrimination.  

            Second, a defendant employer is in the best position to  
            determine the facts regarding its pay practices, so the  
            employer should provide that evidence to the court.  On the  
            other hand, requiring the plaintiff to attempt to invalidate  
            an unknown pay practice, to which the bona fide factor is then  
            added, is unrealistic.  Accordingly, this bill would place the  
            burden on the employer to prove that the practice used by the  
            employer was non-discriminatory, serves the legitimate  







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            business purpose, and there was no alternative practice that  
            would serve that purpose without producing a compensation  
            differential.  In order to provide employees better protection  
            from wage discrimination, this bill provides better  
            specificity to the employer's burden of proving a lawful  
            reason for a wage disparity.

          3.  Retaliation protections  

          The Act does not currently provide for discrimination or  
          retaliation protection to an employee who inquires about his or  
          her wages in order to determine whether he or she is being paid  
          wages less than those paid to employees of the opposite sex.   
          This bill would prohibit an employer from discharging,  
          discriminating, or retaliating against an employee because the  
          employee engaged in conduct protected under the Act.

          CELA argues that "[o]ne obstacle to effective enforcement [of  
          the Act] is that pay discrimination often is 'hidden from  
          sight.'  The current culture of pay secrecy undermines attempts  
          to reduce the wage gap.  Studies have found that a majority of  
          employees are either prohibited or actively discouraged from  
          discussing their pay.  Workers are less likely to inquire about  
          pay if they fear retaliation from their employer for doing so.   
          This secrecy means that workers are unlikely even to discover  
          ongoing pay discrimination, much less to be able to fight  
          against it."

          Further, the Legal Aid Society - Employment Law Center,  
          co-sponsor, states that "[o]ur organization has worked directly  
          on cases involving state and federal equal pay violations.  The  
          deleterious effects that pay inequities have on our clients and  
          their families are devastatingly clear.  Unfortunately,  
          identifying such unlawful pay violations can be quite difficult  
          for our clients, most of whom simply are not privy to  
          information regarding their employer's pay practices and are  
          reluctant to seek out this information for fear of retaliation.  
          . . .  By strengthening the enforcement of existing equal pay  
          legislation and empowering workers to gather information and  
          self-advocate, SB 358 is an important step forward in closing  
          the wage gap."

          This bill seeks to strengthen the Act by helping employees gain  
          access to wage rate information to determine whether they are  
          being paid unequally based on gender.  This bill would also  







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          authorize the employee to file a complaint with the Division of  
          Labor Standards and Enforcement for enforcement of the Act, as  
          well as provide for a civil action for enforcement that must be  
          filed within one year of the retaliation, discharge, or  
          discriminatory act made against the employee.

          4.  Author's amendments

           In order to address concerns raised by opponents, the author  
          offers amendments in Committee that would:
           simplify the characteristics of the work being compared  
            between the plaintiff and employee of the opposite sex;
           simplify the factors upon which the employer could lawfully  
            rely when determining wage rates paid to employees;
           simplify the definition of business necessity; and
           clarify the employer's burden of proof.

          The amendments also extend the employer's record retention  
          requirement from two to three years, and provide for retaliation  
          claims enforcement, including a one-year statute of limitations  
          for bringing a civil action.

          5.  Oppositions' concerns  

          The California Chamber of Commerce and Civil Justice Association  
          of California, opposed unless amended, raise concerns regarding  
          the bill's use of, and definitions for, "work of a comparable  
          character" and "business necessity."  The author is offering  
          amendments in Committee to remove the provisions for work of a  
          comparable character in favor of the opposition's preference of  
          "substantially similar work."  The author is also amending the  
          bill to remove the "safe and efficient operation of the  
          business" provision from the definition of "business necessity."  
           The author is also taking several other technical amendments  
          requested by the opposition.

          The opposition also expressed concern about requiring an  
          employer to prove a negative, that no other alternative practice  
          could have been used to determine employee wages, which, they  
          argue, would be extremely difficult and unlikely for the  
          employer to accomplish.  The opposition prefers to delete the  
          "no alternative practice language" provision in its entirety,  
          which would maintain the existing burden of proving an  
          alternative practice that is currently required to be proven by  
          the plaintiff employee.  In response, the author is amending the  







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          bill to allow the employer to prove that no alternative practice  
          would serve the same legitimate business purpose without  
          producing a compensation differential.  The author believes that  
          the responsibility for ensuring non-discriminatory business  
          practices rests on the employer, and the employee should not  
          have to prove that the employer could have found another way to  
          pay wages that would not have resulted in discriminatory  
          compensation.

          The National Federation of Independent Business, also in  
          opposition, argues that this bill would give employees  
          full-scale decision making authority and the ability to adjust  
          elements of employment positions that already have fair state  
          and federal protections.  They argue this bill would increase  
          frivolous lawsuits against small employers and only serves to  
          advance financial gain for attorneys without solving any  
          workplace problems.


           Support  :  9to5 California, National Association of Working  
          Women; 9to5, National Association of Working Women; American  
          Association of University Women - California; Bet Tzedek Legal  
          Services; Business & Professional Women of Nevada County;  
          California Federation of Teachers, AFT, AFL-CIO; California  
          Labor Federation, AFL-CIO; California Nurses Association;  
          California Rural Legal Assistance Foundation, Inc.; California  
          Women Lawyers; California Women's Law Center; Centro Legal de la  
          Raza; Communications Workers of America, ALF-CIO, District 9;  
          Communications Workers of America, AFL-CIO, CLC Local 9003;  
          Community Action Fund of Planned Parenthood of Orange and San  
          Bernardino Counties; Consumer Attorneys of California; County of  
          Santa Cruz, Board of Supervisors; Glendale City Employees  
          Association; La Raza Centro Legal; Maintenance Cooperation Trust  
          Fund; National Council of Jewish Women-CA; National Partnership  
          for Women & Families; National Women's Law Center; Organization  
          of SMUD Employees; Planned Parenthood Action Fund of Santa  
          Barbara, Ventura & San Luis Obispo Counties; Planned Parenthood  
          Action Fund of the Pacific Southwest; Planned Parenthood  
          Affiliates of California; Planned Parenthood Northern California  
          Action Fund; San Bernardino Public Employees Association; San  
          Diego County Court Employees Association; San Luis Obispo County  
          Employees Association; Women In Non Traditional Employment  
          Roles; Women's Foundation of California; Women's Law Project; 82  
          individuals








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           Opposition  :  California Chamber of Commerce; Civil Justice  
          Association of California; National Federation of Independent  
          Business

                                        HISTORY
           
           Source  :  California Employment Lawyers Association; Equal Rights  
          Advocates; Legal Aid Society-Employment Law Center

           Related Pending Legislation  :

          AB 1354 (Dodd, 2015) would enact the Equal Pay for Equal Work  
          Act of 2015 and require an employer with 100 or more employees,  
          prior to becoming a contractor or subcontractor with the state,  
          to submit an income equality program to the Department of Fair  
          Employment and Housing for approval and certification and  
          require the income equality program to include the collection of  
          summary data on the compensation paid to employees, including  
          data sorted by gender and race, and policies designed to ensure  
          income equality and prevent unlawful discrimination.  AB 1354 is  
          currently in the Assembly Appropriations Committee.

          ACR 50 (Gonzalez, 2015) would proclaim April 14, 2015, as Equal  
          Pay Day in recognition of the need to eliminate the gender gap  
          in earnings by women and to promote policies to ensure equal pay  
          for all.  ACR 50 is currently on the Senate Floor.

           Prior Legislation  :

          AB 2555 (Oropeza, 2006) would have revised the California Equal  
          Pay Act to authorize an award of civil penalties to be paid to  
          the Labor and Workforce Development Agency and would have  
          required specified employers to provide annual statements to  
          employees setting forth job title, wage rate, and how the wages  
          were calculated.  AB 2555 would have required the creation of  
          the Equal Pay Commission to study and report wage disparities  
          between men and women and between minorities and nonminorities.   
          Governor Schwarzenegger vetoed this bill because he believed  
          that, although the historical trend of women earning less than  
          men for doing the same work must be stopped, the provisions of  
          the bill would not help achieve this goal.  Governor  
          Schwarzenegger noted that both state and federal law already  
          provide criminal and civil penalties for an employer that pays  
          discriminatory wage rates to employees on account of gender,  
          which were increased significantly in 2003.  Since then, there  







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          had been only 15 gender-based wage discrimination complaints  
          filed with the Labor Commissioner, which Governor Schwarzenegger  
          said suggested that increased civil penalties are not the best  
          way to ensure wage equity; rather the provisions of the bill  
          would do little more than increase frivolous litigation, a  
          result that benefits no employer or worker, regardless of  
          gender. 

          AB 169 (Oropeza, 2005) would have authorized an award of EPA  
          violation civil penalties with 75 percent of the penalties going  
          to the DLSE and 25 percent going to the employee.  Governor  
          Schwarzenegger vetoed this bill because, although he remained  
          supportive of reasonable efforts to eradicate the historical  
          trend of women earning less than men for doing the same work, he  
          did not believe the bill was necessary in order to achieve this  
          goal.  Governor Schwarzenegger then noted that current state and  
          federal laws forbid paying an individual lower wages on account  
          of gender and provide stiff civil and criminal penalties against  
          employers that do so.  He argued that the bill's elimination of  
          judicial discretion to modify the penalty coupled with the  
          massive increases in fines would do nothing more than increase  
          frivolous litigation and could lead to the same shakedown  
          lawsuits that the citizens of California voted to curb when they  
          passed Proposition 64 in 2004.

          AB 2317 (Oropeza, 2004) would have increased liquidated damages  
          payable by an employer to an employee for violating the  
          California EPA, from an amount equal to the pay differential to  
          treble that amount.  AB 2317 would have further increased the  
          liquidated damages to five times the amount of the pay  
          differential, if it is determined that the employer willfully  
          violated this provision.  Governor Schwarzenegger vetoed the  
          bill because he did not believe it was necessary in order to  
          achieve pay equity.  He noted that current state and federal  
          laws forbid and provide civil and criminal penalties for an  
          employer that pays discriminatory wage rates to employees on  
          account of gender, and the civil penalty for violation of the  
          equal pay requirement was doubled in 2003.  He also noted that  
          he recently signed SB 1809 (Dunn, Ch. 221, Stats. 2004), which  
          classified the violation of equal pay requirements as one of the  
          more serious labor law violations for which an employee can  
          bring a private civil action.  He wanted to allow these new laws  
          time to work before considering additional penalties.

           Prior Vote  :  Senate Labor and Industrial Relations Committee  







          SB 358 (Jackson)
          Page 15 of ? 

          (Ayes 4, Noes 0)

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