BILL ANALYSIS Ó
SB 1063
Page 1
SENATE THIRD READING
SB
1063 (Hall)
As Amended August 19, 2016
Majority vote
SENATE VOTE: 26-13
--------------------------------------------------------------------
|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Labor |5-1 |Roger Hernández, Chu, |Patterson |
| | |McCarty, O'Donnell, | |
| | |Thurmond | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Appropriations |14-5 |Gonzalez, Bloom, |Bigelow, Gallagher, |
| | |Bonilla, Bonta, |Jones, Obernolte, |
| | |Calderon, Daly, |Wagner |
| | |Eggman, Eduardo | |
| | |Garcia, Holden, Quirk, | |
| | |Santiago, Weber, Wood, | |
| | |McCarty | |
| | | | |
| | | | |
--------------------------------------------------------------------
SB 1063
Page 2
SUMMARY: Expands the prohibitions laid down in the California
Equal Pay Act regarding gender, to include discrimination based
on race or ethnicity. Specifically, this bill:
1)Prohibits an employer from paying any of its employees at wage
rates less than the rates paid to employees of another race or
ethnicity for substantially similar work, when viewed as a
composite of skill, effort, and responsibility, and performed
under similar working conditions.
2)Provides exceptions for when the employer demonstrates the
wage differential is based upon one or more of the following
factors, each factor relied upon is applied reasonably and the
one or more factors relied upon account for the entire wage
differential:
a) A seniority system
b) A merit system
c) A system that measures earnings by quantity or quality
of production
d) A bona fide factor other than race or ethnicity, 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 race- or ethnicity-based
differential in compensation, is job related with respect
to the position in question, and is consistent with a
business necessity.
e) For purposes of these provisions, "business necessity"
means an overriding legitimate business purpose such that
the factor relied upon effectively fulfills the business
SB 1063
Page 3
purpose it is supposed to serve. This shall not apply if
the employee demonstrates that an alternative business
practice exists that would serve the same business purpose
without producing the wage differential.
3)Provides technical changes to address chaptering concerns with
AB 1676 (Campos) of the current legislative session.
EXISTING LAW:
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, unless the employer demonstrates
that specific, reasonably applied factors account for the
entire wage differential.
2)Authorizes an employee paid lesser wages in violation of this
prohibition to file a complaint with the Division of Labor
Standards Enforcement, and authorizes the employee, the
division, or the Department of Industrial Relations to
commence a civil action for the wages the employee was
deprived of because of the violation, interest on those wages,
and liquidated damages.
3)Provides that an employer or other person who violates or
causes a violation of that prohibition, or who reduces the
wages of any employee in order to comply with that
prohibition, is guilty of a misdemeanor.
SB 1063
Page 4
FISCAL EFFECT: According to the Assembly Appropriations
Committee, unknown, likely significant costs to the Department
of Industrial Relations (DIR) to process claims associated with
wage discrimination based on race or ethnicity.
The Division of Labor Standards and Enforcement (DLSE) does not
currently receive any pay discrimination claims on the basis of
race or ethnicity, making it difficult to predict costs
associated with this bill. DIR notes, however, that the
Department of Fair Employment and Housing (DFEH) received
roughly 6,500 claims in 2014 alleging employment discrimination
based on race. As a point of comparison, if DLSE received 1% of
the claims DFEH received, this would generate workload for DLSE
of approximately $600,000 (special fund) in the first year and
$570,000 (special fund) in subsequent years.
COMMENTS: The author believes that the Equal Pay Act, in its
current form, fails to address that wage discrimination is not
confined to gender. Women of color, who are paid less than
white women, should be able to make a claim under California's
Equal Pay Act. Men of color, who are paid less than white men,
should be able to make a claim under California's Equal Pay Act
as well.
Supporters argue, "A 2013 study revealed that Asian American
women make 90 cents; African American women make 64 cents, and
Hispanic or Latina women make just 54 cents for every dollar
that a Caucasian man earns. The wage gap isn't only between men
and women, as African American men earn just 75% of the average
salary of a Caucasian male worker. This bill builds upon the
important steps California has taken to address wage inequality
and will set a national standard to ensure that every worker is
paid a fair and equitable wage."
Opponents state, "SB 358 (Jackson), [Chapter 546, Statutes of
2015], which expanded and strengthened the law regarding equal
SB 1063
Page 5
pay for women, just went into effect at the beginning of this
year. The Legislature should allow time for employees,
employers, and the courts to interpret and implement the new
boundaries of the equal pay law before seeking to amend and
expand it."
Analysis Prepared by:
Taylor Jackson / L. & E. / (916) 319-2091 FN:
0004730