BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1063 (Hall) - Conditions of employment: wage differential:
race or ethnicity
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|Version: April 20, 2016 |Policy Vote: L. & I.R. 4 - 1 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: April 25, 2016 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1063 would amend the Equal Pay Act to prohibit
employers from paying employees a wage rate less than that paid
to employees of a different race or ethnicity for substantially
similar work.
Fiscal
Impact: The Department of Industrial Relations (DIR) indicates
that the potential increase in workload resulting from the bill
is unknown. However, as an order of magnitude, if one percent of
the claims currently filed at the Department of Fair Employment
and Housing (DFEH) are instead filed with DIR's Labor
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Commissioner, the department estimates that the bill could
administrative costs of $601,000 in the first year and $570,000
in subsequent years (special fund).
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. Nevertheless, studies show that
women continued to be paid less than their male counterparts,
resulting in what is referred to as the "gender wage gap."
SB 358 (Jackson), Chapter 546, Statutes of 2015 made various
changes to the Act related to gender wage inequality, including
standards relating to employer proof of non-discrimination and
replacing the qualification for discriminatory treatment while
performing "equal work" with "substantially similar work."
DFEH's mission is to protect Californians from, among other
things, employment and housing, discrimination. DFEH is the
largest state civil rights agency in the country. It was
established by the Legislature in 1959 as the Division of Fair
Employment Practices. In 1980, the DFEH was established as an
independent department charged with enforcing California's
comprehensive employment, housing, public accommodations and
public service non-discrimination laws, as well as the State's
bias-related hate violence law. DFEH's statutory mandate, among
other things, is to protect the people of California from
employment discrimination pursuant to the California Fair
Employment and Housing Act (FEHA). FEHA specifically, prohibits
workplace discrimination and harassment on the basis of race,
religious creed, color, national origin, ancestry, physical
disability, mental disability, medical condition, genetic
information, marital status, sex, gender, gender identity,
gender expression, age, sexual orientation, and military and
veteran status, or because another person perceives the employee
to have one or more of these characteristics.
Proposed Law: This bill would expand the prohibitions contained
in the Equal Pay Act to include discrimination based on race or
ethnicity. By adding these provisions, this bill, among other
things (1) duplicates the provisions laid down in the Equal Pay
Act regarding gender, but restates them to prevent wage rate
discrimination based on race or ethnicity, and (2) mirrors the
enforcement mechanism and penalties for wage rate discrimination
based on gender and includes discrimination based on race or
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ethnicity.
Staff
Comments: This bill adopts an identical approach to SB 358 in
addressing wage discrimination. Specifically, it places the
responsibility on the employer to prove or demonstrate that a
wage differential between employees is not occurring as a result
of race or ethnicity. Additionally, this bill uses the
definitions specified in SB 358 regarding the nature of
"business necessity" and "substantially similar work."
DIR currently receives zero pay discrimination claims on the
basis of race or ethnicity; consequently, it lacks historical
data from which to develop an estimate of administrative
expenses. Nevertheless, the protections proposed by this bill
would affect a significant number of the State's workers. As
noted previously, DFEH enforces FEHA, which also has
jurisdiction over wage discrimination as well as much broader
forms of discrimination. DFEH indicates that it received roughly
6,500 claimants in 2015 alleging some form of employment
discrimination based on race. DIR cannot estimate (1) how many
of these would fall within its purview or (2) whether claimants
would go to the DFEH to address these issues or to the DIR's
Division of Labor Standards Enforcement.
Thus, the number of claims DIR would receive as a consequence of
this bill is unknown. As an order of magnitude, if DIR receives
one percent of the number of claims that DFEH receives, this
bill could generate a potential workload costing $601,000 in the
first year and $570,000 in subsequent years.
Employees experiencing discrimination with respect to employment
may currently seek relief under FEHA, which provides a variety
of options, including back pay, hiring, promotion,
reinstatement, out-of-pocket expenses, reasonable accommodation,
affirmative relief, actual damages (including damages for
emotional distress), punitive damages, and attorney fees and
costs. FEHA covers all protective classes, including race and
ethnicity.
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Any local government costs resulting from the mandate in this
measure are not state-reimbursable because the mandate only
involves the definition of a crime or the penalty for conviction
of a crime.
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