BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: June 27, 2012 2011-2012 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: AB 1450
Author: Allen
As Introduced/Amended: April 25, 2012
SUBJECT
Employment: discrimination: status as unemployed
KEY ISSUES
Should legislation be enacted making it unlawful for an employer
to discriminate against an unemployed individual who applies for
employment?
Should it be illegal for an employer, an employment agency or an
Internet Web site to advertise or announce, in job postings, any
provisions pertaining to an individual's current employment or
employment status?
PURPOSE
To prohibit certain employment actions relating to an
individual's status as an unemployed, as specified.
ANALYSIS
Existing federal and state law contains provisions that define
unlawful discrimination and lawful employment practices by
employers and employment agencies to protect both prospective
and current employees against employment discrimination.
The existing Fair Employment and Housing Act (FEHA) prohibits
harassment and discrimination in employment because of race,
color, religion, sex (gender), sexual orientation, marital
status, national origin (including language use restrictions),
ancestry, mental and physical disability, medical condition
(cancer/genetic characteristics), age (40 and above), pregnancy,
denial of medical and family care leave, or pregnancy disability
leave and/or retaliation for protesting illegal discrimination
related to one of these categories or for reporting patient
abuse in tax supported institutions. (Government Code �12940,
12945, 12945.2)
Existing law further regulates anyone who collects, assembles,
evaluates, compiles, reports, transmits, transfers, communicates
information on a consumer's character, general reputation,
personnel characteristics, or mode of living, for employment
purposes, which are matters of public record. (Civic Code
�1786.53) Public records include records documenting an arrest,
indictment, conviction, civil judicial action, tax lien or
outstanding judgment.
Existing law prohibits employers from discriminating,
discharging or refusing to hire an employee based on an
employee's lawful conduct during nonworking hours away from the
employer's premises. (Labor Code �96 & 98.6)
This Bill would prohibit certain employment actions relating to
an individual's employment status, as specified. Specifically,
this bill:
1) Provides various definitions for terms, including the
term "employment status," which is defined as an
individual's present unemployment, regardless of the length
of time that the individual has been unemployed.
2) Defines "employer" as the state or any political or
civil subdivision of the state and any person who directly
or indirectly , as specified, employs or exercises control
over the wages, hours, or working conditions of any person.
3) Prohibits an employer, unless based upon a bona fide
occupational qualification, from doing any of the
following:
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a. Excluding an applicant from the applicant pool
at any stage of the hiring process or refuse to offer
employment because of the individual's employment
status.
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.
4) Prohibits an employment agency, unless based upon a bona
fide occupational qualification, from doing any of the
following:
a. Refusing to offer employment, excluding from
the applicant pool at any stage of the hiring process,
or failing to refer an individual for employment
because of his/her 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 an advertisement or announcement
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for any job that includes either:
i. A provision indicating that an
individual's current employment is a requirement
for a job; or
ii. A provision indicating that an
employer will not consider an applicant for
employment based on that individual's employment
status.
5) Prohibits a person who operates an Internet Web site for
posting jobs, unless based on a bona fide occupational
qualification, 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.
6) Specifies that this bill does not prohibit an employer
or other entity from doing either of the following:
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 or circulating an advertisement for a
job vacancy that states that only applicants who are
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currently employed by that employer will be considered
("internal" hiring).
7) Specifies that this bill does not preclude an employer
or other entity from doing any of the following:
a. Obtaining information regarding an
individual's employment, the dates of employment, or
the reasons for the separation from employment;
b. Having knowledge of a person's employment
status;
c. Considering an individual's employment history
or the reasons underlying an individual's employment
status;
d. Refusing to offer employment to a person
because of the reasons underlying an individual's
employment status; or
e. Otherwise making employment decisions
pertaining to that individual.
8) Prohibits an employer, an employment agency, or a person
operating an Internet Web site for job postings from doing
either of the following:
a. Interfering with, restraining, or denying any
right provided under this bill.
b. Discriminating against any individual because
he/she:
i. Opposed a practice made unlawful by
this bill;
ii. Has caused to be instituted any
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proceeding under the bill;
iii. Has given information in connection
with any inquiry or proceeding relating to any
right provided under this bill; and
iv. Has testified in any inquiry or
proceeding relating to any right provided.
9) Makes a violation of these provisions subject to a civil
penalty no to exceed $1000 for the first violation, $5,000
for the second violation, and $10,000 for each subsequent
violation, enforceable by the Labor Commissioner.
10) Provides that a state contract entered into on or 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 (for a period not to exceed three
years) from eligibility for future state contracts, as
specified.
11) Specifies that a contractor who has been debarred by the
Labor Commissioner (for violations of the provisions of
this bill) is ineligible during that time for an award of a
contract.
COMMENTS
1. "Unemployed Need Not Apply": Background on the Issue
The nation is suffering from a severe unemployment crisis that
has affected nearly all sectors of the economy. California's
unemployment rate in May of this year was 10.8 percent while
the U.S. unemployment rate stood at 8.2 percent. The economic
recovery has been slow, and although the unemployment rate in
California has decreased slightly, there are still many
families struggling with unemployment. According to the
National Employment Law Project, millions have been out of
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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 than
nine months, as of June 2011.
Over the past couple of years, news accounts have emerged
throughout the country suggesting that some employers have
established blanket exclusions of unemployed workers from job
consideration using terms like "must be currently employed" or
"require current (or very recent) tenure," as part of the
qualifications for employment. One of the first stories
reported, in May 2010, involved accounts by media in Atlanta
reporting that Sony Ericsson's newly relocated headquarters
had posted a job announcement for a marketing position 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."
2. Need for this bill?
At the core of the economic crisis is the fact that there
simply are not enough jobs. According to the NELP briefing
report, the jobs deficit in July 2011 exceeded 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. In May 2011, there
were nearly five unemployed workers for every one job opening.
The lack of available jobs creates obstacles for the millions
of unemployed who simply want to get back to work.
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Existing law authorizes employers to conduct an investigation,
such as a background check, into an individual's character for
employment purposes, however, special rules apply to anyone
who collects, assembles, evaluates, compiles or reports
information on matters of public record. Existing law also
prohibits harassment and discrimination in employment because
of race, color, religion, sex and sexual orientation, among
others. However, nothing specifically addresses the issue of
discriminating against the unemployed.
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). Many advocates and policymakers have
referred to this phenomenon as "discrimination against the
unemployed" and have argued that it is not only improper
towards those who have suffered the misfortune of a layoff,
but also exacerbates the downturn by keeping qualified
applicants out of the job market. This bill attempts to ban
such a practice under state law by prohibiting employers from
excluding from the applicant pool (or refusing to offer
employment to) an individual based on his/her employment
status.
3. Similar Efforts at the Federal Level and in Other States :
In July 2011, Representatives Rosa DeLauro (D-CT) and Henry
Johnson, Jr. (D-GA) introduced federal legislation (H.R. 2501)
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.
Senator Richard Blumenthal (D-CT), Kirsten Gillibrand (D-NY)
and Sherrod Brown (D-Ohio) introduced a Senate version of the
bill on August 2, 2011 (S. 1471). Both bills are still
pending further legislative action.
Similar efforts have been 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
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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.
About a dozen other states, including Oregon, Connecticut, New
York, and Pennsylvania are currently considering legislation
to prohibit this type of employment discrimination.
4. Proponent Arguments :
According to the author and proponents, the Great Recession
has inflicted historic levels of pain and suffering on
unemployed families and produced the most competitive job
market in decades. Unfortunately, they argue, this recession
has also 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-sponsors
argue that this creates a perverse "catch-22" wherein these
employers require an applicant to already have a job in order
to find a job.
The author and co-sponsors argue 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, they argue, California's
unemployed will face one less obstacle to finding a successful
return to the workforce.
Overall, proponents argue that as California climbs out of
this recession, employers should not be placing new barriers
in front of unemployed as they work to regain employment and
reconstruct pre-recession lifestyles for themselves and their
families. Passage of this bill will send a clear message to
California's employers that the state is serious about
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economic recovery that benefits all Californians - unemployed,
employed and new workforce entrants seeking first time
employment.
5. Opponent Arguments :
Opponents argue that this bill would 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
"unemployed status." Opponents further state that this bill
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.
According to opponents, in order to avoid accidentally
exposing an applicant's current status as "unemployed" during
the application process, employers will ultimately be barred
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, they believe, could reveal that the
applicant either is currently unemployed or was previously
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 Codes section
17200 et.seq. for alleged unfair business practices.
Moreover, opponents argue that this bill does not
differentiate between applicants who are unemployed due to
their inadequate performance with a prior employer, versus
those who were part of a lay-off. They argue that an employer
should be allowed to investigate the reasons a person is
unemployed before offering that person a job. They argue that,
unfortunately, this bill would place employers in the
impossible situation of either: (1) investigating an
applicant's most recent employment, including the reasons for
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the separation and potentially face an administrative claim or
litigation for alleged violations if the applicant is
ultimately not hired; or (2) forego any investigation 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.
Overall, opponents believe that this bill will essentially
create a hiring preference where 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. They argue that 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.
6. Double Referral :
Should this bill be passed by the Committee, it will next be
referred to the Senate Judiciary Committee for a hearing.
SUPPORT
California Labor Federation (Sponsor)
National Employment Law Project (Co-Sponsor)
American Federation of State, County and Municipal Employees,
AFL-CIO
California Alliance for Retired Americans
California Communities United Institute
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Nurses Association
California School Employees Association
California State Association of Electrical Workers
California State Pipe Trades Council
California Teamsters Public Affairs Council
California Workforce Association
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Coalition of California Utility Employees
Consumer Attorneys of California
Consumer Federation of California
Engineers and Scientists of California
Glendale City Employees Association
International Longshore & Warehouse Union
International Union of Elevator Constructors
Laborers' Locals 777 & 972
Legal Service for Prisoners with Children
National Association of Social Workers, California Chapter
Northern California District Council of the international
Longshore and Warehouse Union
Organization of SMUD Employees
Professional & Technical Engineers, Local 21
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
UNITE HERE!
United Food and Commercial Workers Union, Western States Council
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
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
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California Manufacturers & Technology Association
California Retailers Association
City of Palm Desert
Claremont Chamber of Commerce
Easter Seals Superior California
Engineering Contractors' Association
Flasher Barricade Association
Greater Riverside Chamber of Commerce
Marin Builders Association
National Federation of Independent Business
Orange County Business Council
Plumbing-Heating-Cooling Contractors Association of California
San Gabriel Valley Legislative Coalition of Chambers
TechAmerica
TechNet
Western Electrical Contractors Association Inc.
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