BILL ANALYSIS �
AB 1450
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Date of Hearing: April 17, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 1450 (Allen) - As Amended: March 14, 2012
As Proposed to be Amended
SUBJECT : DISCRIMINATION ON THE BASIS OF UNEMPLOYMENT
KEY ISSUE : SHOULD JOB APPLICANTS BE DISCRIMINATED AGAINST IN
RECRUITMENT AND HIRING BECAUSE THEY ARE CURRENTLY UNEMPLOYED?
FISCAL EFFECT : As currently in print this bill is currently
keyed fiscal.
SYNOPSIS
This bill would prohibit job discrimination against prospective
applicants because they are currently unemployed. The current
economic recession has reportedly fueled the phenomenon of
explicit bias against persons on the basis of unemployment, a
factor that the advocates for this bill contend is not only
improper toward those who have suffered the misfortune of
layoff, but also exacerbates the downturn by keeping qualified
applicants out of the job market. A similar measure has been
adopted in New Jersey, and others are pending in Congress and
other states. Opponents representing business interests argue
that the bill will essentially prohibit employers from
legitimately inquiring into an applicant's employment history.
SUMMARY : Prohibits employment actions relating to an
individual's employment status, as specified. Specifically,
this bill :
1)Defines "employment status" to mean an individual's present
unemployment, regardless of the length of time that the
individual has been unemployed.
2)Prohibits an employer with 5 or more employees, unless based
upon a bona fide occupational qualification, from doing any of
the following:
a) Refusing to consider an individual or offer employment
because of the individual's employment status.
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b) Publishing an advertisement or announcement for any job
that includes either:
i) A provision indicating that an individual's current
employment is a requirement of the job; or
ii) A provision indicating that an employer will not
consider an applicant for employment based on that
individual's employment status.
c) Directing an employment agency to take an individual's
employment status into account in screening or referring
applicants for employment.
3)Prohibits an employment agency, unless based upon a bona fide
occupational qualification, (a term that is defined elsewhere
in employment law to mean a requirement reasonably necessary
to the normal operation of a particular business) from doing
any of the following:
a) Refusing to offer employment, or to consider or refer an
individual for employment, because of the individual's
employment status.
b) Limiting, segregating or classifying individuals in any
manner that limits their access to information about jobs
or referrals because of their employment status.
c) Publishing the specified advertisements or
announcements.
4)Prohibits a person who operates an Internet Web site for
posting jobs from publishing an advertisement or announcement
for any job that includes:
a) A provision indicating that an individual's current
employment is a requirement of the job; or
b) A provision indicating that an employer will not
consider an applicant for employment based on that
individual's employment status.
5)Specifies that this bill does not prohibit an employer or
other entity from doing either of the following:
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a) Publishing an advertisement or announcement that sets
forth other lawful qualifications for a job, including but
not limited to, the holding of a current and valid
professional or occupational license, certificate,
registration, permit, or other credential, or a minimum
level of education or training or professional,
occupational, or field experience.
b) Printing an advertisement for a job vacancy that states
that only applicants who are currently employed by that
employer will be considered ("internal" hiring).
6)Specifies that this bill does not preclude an employer or
other entity from considering an individual's employment
history or from examining the reasons underlying an
individual's employment status in assessing an individual's
ability to perform a job or in otherwise making employment
decisions pertaining to that individual.
7)Makes a violation of these provisions subject to a civil
penalty of $1000 for the first violation, $5,000 for the
second violation, and $10,000 for each subsequent violation,
enforceable by the Labor Commissioner.
8)Provides that a state contract entered into after January 1,
2013 shall require compliance with these requirements, and
that failure to comply may be grounds for cancelling,
terminating, or suspending the contract and debarring the
contractor from eligibility for future state contracts, as
specified.
EXISTING LAW , pursuant to the Fair Employment and Housing Act,
prohibits discrimination in employment on the basis of specified
factors, including race, national origin, sex, age, disability
and sexual orientation. (Government Code section 12920 et seq.)
COMMENTS : Over the last year, significant media attention has
focused on reports that some employers are refusing to consider
applicants for employment unless those individuals are currently
employed in other jobs (thereby excluding from consideration
those applicants who are currently unemployed). In this
economic downturn, many advocates and policymakers have referred
to this phenomenon as "discrimination against the unemployed."
This bill attempts to prohibit such a practice under state law.
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Concern Regarding "Unemployed Need Not Apply." In the summer of
2010, news accounts began to emerge suggesting that some
employers were establishing a blanket exclusion of unemployed
workers from job consideration. One of the first stories
involved a report by media in Atlanta that Sony Ericsson's newly
relocated headquarters had posted a job announcement that
explicitly stated, "No Unemployed Candidates Considered At All."
Subsequently, in early 2011 the National Employment Law Project
(NELP) conducted a four-week review of the nation's most
prominent online job listing websites. The online research
sought information on both employers and staffing firms that
were specifically identified by name from across the United
States. NELP's research of job postings identified more than
150 ads that included exclusions based on current employment
status. ("Briefing Paper: Hiring Discrimination Against the
Unemployed." National Employment Law Project (July 12, 2011).)
Most of the ads specifically stated that applicants "must be
currently employed."
In June 2011, a national survey conducted by Hart Research
Associates indicated that 80 percent of respondents described
the refusal to consider unemployed job applicants as "very
unfair." Nearly two-thirds of respondents said they favored
federal legislation to make "it illegal for companies to refuse
to hire or consider a qualified job applicant solely because the
person is currently unemployed."
Do Such Policies Exacerbate The Unemployment Crisis? Supporters
of this bill argue that employer policies that preclude
consideration of the unemployed in hiring are not only
fundamentally unfair, they also reflect insensitivity to today's
severe jobs deficit. NELP states:
By any measure, the nation is suffering from a severe
unemployment crisis, cutting across nearly all sectors of
the economy. High unemployment has persisted for three
years, with the national unemployment rate hovering around
9 percent for more than two years and edging up to 9.2
percent in June 2011. Millions have been out of work for
significantly longer than in any other recession on record:
nearly 6.3 million unemployed workers have been out of work
for six months or longer, and the average spell of
unemployment has risen, reaching nearly 40 weeks, or more
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than nine months, as of June 2011.
Our ongoing unemployment crisis is not the result of
unwillingness to work on the part of the unemployed, or a
mismatch between available jobs and skills of job seekers.
At the core of the crisis is the fact that there simply are
not enough jobs. Our current jobs deficit exceeds 11
million jobs, taking into account the net number of jobs
lost since December 2007 and the additional new jobs that
were needed simply to keep up with population growth. As
one small measure of the intense competition for jobs
resulting from this deficit, the ratio of unemployed
workers (that is, individuals who are without jobs and are
actively looking for work) to the number of new job
openings (net) is alarmingly high. The most recent figures
available show that during the month of May 2011, there
were more than nearly five unemployed workers for every one
job opening-the exact ratio stood at 4.7-to-13. May 2011
marked the 29th consecutive month during which there was
only one opening for at least every four unemployed
workers.
By comparison, at the start of the Great Recession in
December 2007, there were less than two unemployed workers
for every opening. Even during the prior 2001 recession and
its aftermath, the ratio of unemployed to job openings
peaked at 2.8-to-1-a level surpassed less than a year into
the current downturn.
Competition for jobs is stiff in every part of the country,
with unemployed workers outnumbering available job openings
by nearly four-to-one or more in every region. In the West,
the demand for scarce jobs is even greater, with five or
more unemployed workers for every opening as of May; the
South is not far behind. The ratio of unemployed workers to
job openings has roughly doubled in every region and at the
national level since the start of the Great Recession, and
in the South and West, it has roughly tripled.
Taken together, the lack of available job openings and the
denial of employment opportunities that do exist create
stark obstacles for more than 14 million unemployed who
simply want to get back to work.
Similar Federal Legislative Efforts and Legislation in Other
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States . In July 2011, Representatives Rosa DeLauro (D-CT) and
Henry Johnson, Jr. (D-GA) introduced federal legislation known
as the "Fair Employment Opportunity Act of 2011," which
prohibits employers and employment agencies from refusing to
consider job applicants solely because they are unemployed.
Similar efforts have been and are being attempted in other
states. The State of New Jersey became the first such state to
enact a law, effective June 1, 2011. (New Jersey Statutes,
Title 34, Chapter 8 B Sections 1-2-C.348B-1 to 34:8B-2.) The
New Jersey statute prohibits an employer from publishing a job
posting that states any of the following: (1) current employment
is a job qualification; (2) currently unemployed candidates will
not be considered; or (3) only currently employed job applicants
will be considered.
According to information provided by the author's office,
similar legislation is currently pending in at least eleven
other states.
ARGUMENTS IN SUPPORT : The co-sponsor of this bill, the
California Labor Federation, AFL-CIO argues that the current
economic downturn presents unemployed workers with a wide
variety of unique challenges - our unemployment rate hovers at
over 10 percent and those without jobs have found themselves
idles for historic lengths of time.
The Labor Federation states that, in addition, this recession
has given birth to a new and particularly insidious form of
discrimination. Across the country, many employers, employment
agencies, and online job websites have begun to openly advertise
warnings such as "no unemployed candidates considered" or "must
be currently employed." The co-sponsor argues that this creates
a perverse "catch-22" wherein these employers require an
applicant already have a job in order to find a job.
The co-sponsor argues that this bill will ban such
discrimination, whether in advertisements or through hiring
policies. Employers will also be prohibited from refusing to
hire someone because of their employment status, while an
employer's right to consider employment history is explicitly
protected. They argue that this common sense reform simply ends
blanket policies that exclude qualified workers from
consideration and therefore only affects employers currently
engaging in this process. Meanwhile, California's unemployed
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will face one less obstacle to finding a successful return to
the workforce.
In addition, the California Workforce Association (which
represents the 48 local workforce investment boards in
California) writes the following:
As California climbs out of this recession, employers
should not be placing new barriers in front of unemployed
Californians as they work to regain employment and
reconstruct pre-recession lifestyles for themselves and
their families. The effect of this practice is to create a
perpetual under class that will be shut out of employment
as long as they are competing against those who are already
employed. Passage of this bill will send a clear message
to California's employers that the state is serious about
economic recovery that benefits all Californians -
unemployed, employed and new workforce entrants seeking
first time employment.
ARGUMENTS IN OPPOSITION : Writing in opposition to this bill, a
coalition of employer groups lead by the California Chamber of
Commerce argues that the bill "will essentially prohibit
employers from legitimately inquiring into an applicant's
employment history, due to fear that any such inquiry will
ultimately lead to penalties and costs on the basis that the
applicant was discriminated against because of his/her status as
unemployed. It also unfairly targets state contractors by
imposing a three-year debarment from state contracts if found to
have violated the provisions of the bill, thus essentially
providing a hiring preference for the unemployed with state
contractors."
Opponents go on to state:
AB 1450 prohibits employers from considering an applicant's
current "employment status" when hiring for an available
position, unless such status satisfies a "bona fide
occupational" requirement. Despite the fact that the bill
states it does not prohibit an employer from conducting a
review of the applicant's employment status or the reasons
for any separation of employment, AB 1450 will essentially
do just that. In order to avoid accidentally exposing an
applicant's current status as "unemployed" during the
application process, employers will ultimately be barred
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from: (1) asking for information regarding the applicant's
most recent employer; (2) the dates of employment with the
most recent employer; or (3) reasons for the separation of
employment with the most recent employer. Any of these
legitimate inquiries could reveal that the applicant is
currently unemployed, thereby subjecting the prospective
employer to fees, penalties, and an administrative claim
through the Division of Labor Standards Enforcement (DLSE),
as well as potential litigation under the Labor Code
Private Attorney General Act (PAGA), or Business and
Professions Code section 17200 et. seq. for alleged unfair
business practices.
Moreover, AB 1450 does not differentiate between those
applicants who are unemployed due to their inadequate or
insufficient performance with their most recent employer,
versus those applicants who were unfortunately a part of a
lay-off. An employer should be allowed to investigate the
reasons a person is unemployed, including whether the
applicant was recently terminated for serious misconduct,
before offering that person a job and bringing him/her into
the workplace. AB 1450, however, would place employers in
the impossible situation of either: (1) investigating an
applicant's most recent employment, including the reasons
for the separation of his/her employment with the employer
and potentially face an administrative claim or litigation
for the alleged violation of AB 1450 if the applicant is
ultimately not hired; or (2) forego any investigation into
the most recent employment of the applicant to prevent a
claim that he/she was discriminated against on the basis of
the applicant's "unemployed status," and risk a potential
negligent hiring claim on the backend for hiring an at-risk
employee that the employer knew or should have known was a
potential danger.
AB 1450 will also essentially create a hiring preference
for such individuals, especially for state contractors.
Instead of basing an employment decision on the actual
qualifications of the applicant, employers will likely lean
towards an unemployed applicant solely to eliminate any
claim of alleged discrimination. This will certainly be
the case for state contractors, as AB 1450 unfairly targets
these employers by threatening them with three years of
debarment if found to have discriminated against an
applicant based upon their unemployed status.
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Ironically, AB 1450 does not specifically include the state
within its protections, and therefore any prohibition
against discrimination on the basis of unemployed status
would not apply to state employers. See California
Correctional Peace Officers' Association v. State of
California, 188 Cal.App.4th 646,653 (2010). Accordingly,
the state would not be punished for discriminating against
the unemployed with regard to employment decisions;
however, employers that contract with the state would be
disbarred for three years if they are found to have
discriminated on this basis. Such an inconsistent standard
is completely unfair and places an additional burden on
private sector employers to which the public sector is not
equally bound.
Finally, this bill will not affect the unemployment rate.
If there is an available position, the employer will
ultimately hire someone. The only thing AB 1450 does is
instruct a private employer on who they can and cannot
hire, which we believe is inappropriate. The ability to
determine which candidate is the most qualified for an
available position is an independent decision that should
be left to the employer, not state government.
The California Employment Law Counsel (CELC) does not oppose
this bill's restrictions on advertisements, but does oppose the
remaining portions of the bill related to hiring decisions
because they argue that it will result in "endless litigation
every time an unemployed person is not hired for a position."
They therefore oppose the bill unless amended.
Author's Proposed Clarifying Amendments. In order to address
employer concerns, the author prudently proposes to clarify that
the bill does not seek to prohibit an employer from inquiring
about job qualifications, experience at a prior job and reason
for leaving prior employment, as follows:
1048. This chapter does not preclude an employer, an employment
agency, or a person who operates an Internet Web site for
posting jobs in this state from (1) obtaining information
regarding an individual's employment, the dates of employment or
the reasons for the separation of employment; (2) having
knowledge of a person's employment status; (3) considering an
individual's employment history or from examining the reasons
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underlying an individual's employment status in assessing an
individual's ability to perform a job (4) refusing to offer
employment because of the reasons underlying an individual's
employment status or (5) otherwise making employment decisions
pertaining to that individual.
A further amendment clarifies that the bill would apply to
California employers covered by Wage Commission Order 4 by
substituting the following definition of employer:
"Employer" means any person as defined in Section 18 of the
Labor Code, who directly or indirectly, or through an agent or
any other person, employs or exercises control over the wages,
hours, or working conditions of any person.
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation, AFL-CIO (co-sponsor)
National Employment Law Project (co-sponsor)
American Federation of State, County and Municipal Employees
California Alliance of Retired Americans
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Employment Lawyers Association
California Immigrant Policy Center
California Nurses Association
California Professional Firefighters
California Rural Legal Assistance Foundation
California School Employees Association
California State Association of Electrical Workers
California State Pipe Trades Council
California Teamsters Public Affairs Council
California Workforce Association
Coalition of California Utility Employees
Consumer Attorneys of California
Consumer Federation of California
International Longshore and Warehouse Union
International Union of Elevator Constructors
National Association of Social Workers, California Chapter
Northern California District Council of the International
Longshore and Warehouse Union
Professional & Technical Engineers, Local 21
United Food and Commercial Workers Union, Western States Council
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UNITE HERE
Western States Council of Sheet Metal Workers
Opposition
Air Conditioning Trade Association
Associated Builders and Contractors of California
Associated General Contractors
California Apartment Association
California Association of Bed & Breakfast Inns
California Association of Joint Powers Authorities
California Bankers Association
California Chamber of Commerce
California Chapter of American Fence Association
California Employment Law Council (oppose unless amended)
California Farm Bureau Federation
California Fence Contractors' Association
California Framing Contractors Association
California Grocers Association
California Hotel & Lodging Association
California Independent Grocers Association
California Landscape Contractors Association
California League of Food Processors
California Manufacturers & Technology Association
California Retailers Association
Engineering Contractors' Association
Flasher Barricade Association
Garden Grove Chamber of Commerce
Greater Riverside Chamber of Commerce
Marin Builders Association
National Federation of Independent Business
Orange County Business Council
Plumbing-Heating-Cooling Contractors Association of California
TechAmerica
TechNet
Western Electrical Contractors Association, Inc.
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
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