BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        SB 358|
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                                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  








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          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  








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            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









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               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  








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            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  








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          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








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          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









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          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  








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          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


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