BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 358|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
UNFINISHED BUSINESS
Bill No: SB 358
Author: Jackson (D), et al.
Amended: 7/9/15
Vote: 21
SENATE LABOR & IND. REL. COMMITTEE: 4-0, 4/22/15
AYES: Mendoza, Jackson, Leno, Mitchell
NO VOTE RECORDED: Stone
SENATE JUDICIARY COMMITTEE: 5-1, 4/28/15
AYES: Jackson, Hertzberg, Leno, Monning, Wieckowski
NOES: Anderson
NO VOTE RECORDED: Moorlach
SENATE APPROPRIATIONS COMMITTEE: 5-0, 5/18/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NO VOTE RECORDED: Bates, Nielsen
SENATE FLOOR: 38-0, 5/26/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Hancock,
Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno,
Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach,
Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner, Stone,
Vidak, Wieckowski, Wolk
NO VOTE RECORDED: Hall
ASSEMBLY FLOOR: 76-2, 8/27/15 - See last page for vote
SUBJECT: Conditions of employment: gender wage differential
SOURCE: Author
DIGEST: This bill makes various changes to the California
SB 358
Page 2
Equal Pay Act related to gender wage inequality.
Assembly Amendments clarify the bona fide factor affirmative
defense.
ANALYSIS: Existing law, under the California Equal Pay Act
(Act):
1)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. (Labor Code §1197.5(a).)
2)States that any employer who violates the above section is
liable to the amount of the employee's wages and interest that
the employee is deprived in addition to liquidated damages,
administered and enforced by the Division of Labor Standards
Enforcement (DLSE) which may supervise the payment of wages
and interest found to be due. (Labor Code §1197.5)
3)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. (Labor
Code §1197.5(d).)
4)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. (Labor Code
§1197.5(e).)
5)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
SB 358
Page 3
costs of suit. (Labor Code §1197.5(f).)
6)Provides that any employee receiving less than the wage to
which the employee is entitled 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. (Labor Code §1197.5(g).)
7)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. (Labor Code §1197.5(h).)
8)Bars an employer from requiring an employee to refrain from
disclosing the amount of his or her wages, requiring an
employee to sign a waiver or other document that denies the
employee the right to disclose the amount of his or her wages
or discharge, or formally disciplining, or otherwise
discriminating against an employee who discloses the amount of
his or her wages. (Labor Code §232)
This bill:
1)Prohibits 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:
a) The wage differential is based upon one or more of the
following factors:
i) A seniority system;
ii) A merit system;
iii) A system that measures earnings by quantity or
quality of production; or
SB 358
Page 4
iv) A bona fide factor other than sex, such as
education, training, or experience. This factor shall
apply only if the employer demonstrates that the factor
is not based on or derived from a sex-based differential
in compensation, is job related with respect to the
position in question, and is consistent with a business
necessity.
v) A business necessity is defined as an overriding
legitimate business purpose such that the factor relied
upon effectively fulfills the business purpose it is
supposed to serve.
b) Each factor relied upon is applied reasonably; and
c) The one or more factors relied upon account for the
entire pay differential.
2)Extends the employer's record retention requirement from two
to three years.
3)Prohibits 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.
4)Makes 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 bill.
5)Extends the existing enforcement mechanisms, as specified, for
wage discrimination under the Act to claims for retaliation,
and provides a one-year statute of limitations for retaliation
claims.
6)Authorizes 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
SB 358
Page 5
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.
Also requires a civil action to recover wages for retaliation
to be commenced no later than one-year after the cause of
action occurs.
7)Makes various related legislative findings and declarations
and makes several technical, non-substantive changes.
Background
Research on gender pay disparity. According to the American
Association of University Women (AAUW) for full-time year-round
work today that number stands at 78% for women compared to their
male counterparts. AAUW also ranked the wage gap for individual
states in the U.S., California ranking 5th with a gap of 84%.
AAUW also noted that the pay gap is worse for women of color,
with Hispanic and African American women making 54% and 64% of
white men's earnings respectively.
This gap has narrowed due to various factors, including women's
progress in education as well as workforce participation. A
study from Francine D. Blau and Lawrence M. Khan, "The Gender
Pay Gap: Have Women Gone as Far as They Can?" discuss that while
factors such as educational attainment, experience, demographic
characteristics, job type, industry, or union status explain
about 49% of the wage gap, 41% of the gap is not explained by
such factors. Meaning if women had the same education,
experience, demographic characteristics, industrial and
occupational distribution, and union coverage as men, the wage
ratio would rise to about 91% of men's wages - an 8% unexplained
difference that researchers suggest could be influenced by
discrimination. A 2013 Congressional Research Service report
"Pay Equity: Legislative and Legal Developments" referenced a
study commissioned by the U.S. Department of Labor that used a
different data source than Blau and Kahn from 2007 and a
slightly different set of personal and human capital
characteristic controls. The study found an unexplained
earnings differential between 5% and 7%.
FISCAL EFFECT: Appropriation: No Fiscal
SB 358
Page 6
Com.:YesLocal: Yes
According to the Assembly Appropriations Committee, one-time
administrative costs of approximately $127,000 (Labor
Enforcement Compliance Fund - LECF) and ongoing costs of
approximately $120,000 (LECF) for DIR to monitor and enforce
provisions of this bill.
SUPPORT: (Verified8/28/15)
9to5 California, National Association of Working Women
9to5, National Association of Working Women
Alliance of Californians for Community Empowerment
American Association of University Women
American Association of University Women - California
American Civil Liberties Union of California
Bay Area Council
Bet Tzedek Legal Services
Business & Professional Women of Nevada County
CalAsian Chamber of Commerce
California Chamber of Commerce
California Child Care Resource and Referral Network
California Employer Law Center
California Federation of Teachers, AFT, AFL-CIO
California Hospital Association
California Immigrant Policy Center
California Labor Federation, AFL-CIO
California Newspaper Publishers Association
California Nurses Association
California Partnership
California Professional Firefighters
California Rural Legal Assistance Foundation, Inc.
California School Employees Association, AFL-CIO
California Women Lawyers
California Women's Law Center
California Work and Family Coalition
Career Ladders Project
Center for Popular Democracy
Centro Legal de la Raza
Child Care Law Center
SB 358
Page 7
City of West Hollywood
Civil Justice Association of California
Communications Workers of America, AFL-CIO, CLC Local 9003
Communications Workers of America, ALF-CIO, District 9
Community Action Fund of Planned Parenthood of Orange and San
Bernardino Counties
Computing Technology Industry Association
Consumer Attorneys of California
Council on American-Islamic Relations, California Chapter
County of Santa Cruz, Board of Supervisors
Courage Campaign
Glendale City Employees Association
La Raza Centro Legal
Maintenance Cooperation Trust Fund
Monterrey County Board of Supervisors
Mujeres Unidas y Activas
National Council of Jewish Women - California
National Domestic Workers Alliance
National Organization for Women
National Partnership for Women & Families
National Women's Law Center
Organization of SMUD Employees
Parent Voices
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
Raising California Together
Redlands Area Democratic Club
Restaurant Opportunities Centers United
San Bernardino Public Employees Association
San Diego County Court Employees Association
San Francisco Unified School District
San Luis Obispo County Employees Association
TradesWomen Inc.
Ultra Violet
Western Center on Law and Poverty
Women In Non Traditional Employment Roles
Women's Foundation of California
Women's Law Project
SB 358
Page 8
OPPOSITION: (Verified8/28/15)
California National Organization for Women
ARGUMENTS IN SUPPORT: Proponents note that ending the gender
wage gap would cut the poverty rate for working single mothers
by nearly half, from 28.7 percent to 15 percent. They note that
as a group working women in California lose over $33 billion
each year, with the problem even worse for women of color.
Proponents argue that existing laws have been ineffective in
closing the gender-based pay gap, noting that the California
Equal Pay Act has been in effect for over 65 years, with the
last revision in 1985. Proponents contend that its protections
sorely need to be strengthened and updated. Proponents argue
that SB 358 will strengthen California's existing Equal Pay Act
by eliminating loopholes that prevent effective enforcement and
powering employees to discuss pay without fear of retaliation.
Proponents specifically argue that SB 358 will ensure employees
performing substantially equivalent work are paid fairly by
requiring equal pay for work of a comparable character,
eliminating the outdated same establishment requirement, by
replacing the any bona fide factor other than sex catch-all
defense with more specific affirmative defenses and strengthen
protections for workers who inquire about or discuss their wages
or those of their coworkers.
ARGUMENTS IN OPPOSITION: The California National
Organization for Women (CA NOW) opposes this bill unless amended
to include protections for wage discrimination for categories
such as race, ethnicity, LGBTQ and disability status. CA NOW
acknowledges the bill goes a long way towards addressing the
substantive inequities of the original Equal Pay Act, however,
these improvements "must be accompanied by a broadening of
claimants to include all forms of invidious wage
discrimination." According to CA NOW, it is wrong to deny
certain employees full protection under the California Equal Pay
Act because these groups are afforded protections from other
SB 358
Page 9
anti-discrimination laws. What makes the Equal Pay Act
different from other anti-discrimination laws is the burden of
proof placed on employers. Therefore, Cal NOW opposes this
bill, unless amended to include protections for wage
discrimination based on these additional categories.
ASSEMBLY FLOOR: 76-2, 8/27/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,
Dodd, Eggman, Beth Gaines, Gallagher, Cristina Garcia, Eduardo
Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove,
Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer,
Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell,
Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas,
Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond,
Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NOES: Brough, Harper
NO VOTE RECORDED: Frazier, Obernolte
Prepared by:Deanna Ping / L. & I.R. / (916) 651-1556
8/29/15 10:09:45
**** END ****