BILL NUMBER: AB 2555 ENROLLED
BILL TEXT
PASSED THE ASSEMBLY AUGUST 22, 2006
PASSED THE SENATE AUGUST 17, 2006
AMENDED IN SENATE AUGUST 14, 2006
AMENDED IN ASSEMBLY MAY 26, 2006
AMENDED IN ASSEMBLY APRIL 17, 2006
INTRODUCED BY Assembly Member Oropeza
FEBRUARY 23, 2006
An act to amend Section 1197.5 of, and to add and repeal Section
1197.7 to, the Labor Code, relating to wages.
LEGISLATIVE COUNSEL'S DIGEST
AB 2555, Oropeza Wages: gender pay equity.
Existing law generally prohibits an employer from paying an
employee at wage rates less than the rates paid to employees of the
opposite sex in the same establishment. Existing law further imposes
penalties on an employer who violates this provision, subjecting the
employer to civil action and specifying liquidated damages that may
be paid to an employee who is paid unfairly.
This bill would increase the damages for which an employer may be
liable to include a civil penalty of twice the balance of the wages
due to the aggrieved employee, or 4 times the balance of the wages
due if the employer's violation is willful, distributed to the Labor
and Workforce Development Agency for specified purposes.
Existing law requires an employer to maintain records of wages,
wage rates, job classifications, and other terms and conditions of
employment of the employer's employees.
This bill would require an employer of 50 or more employees to
provide each employee with a written statement setting forth the
employee's job title, wage rate, and explanation as to how the
employee's wages are calculated.
This bill would require the Secretary of Labor and Workforce
Development to appoint a commission comprised of representatives from
various backgrounds to study pay disparities and report to the
Legislature. This provision would become inoperative on April 1,
2008, and would be repealed on January 1, 2009.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares as follows:
(a) Forty-three years after passage of the federal Equal Pay Act
of 1963 (29 U.S.C. Sec. 206) and Title VII of the federal Civil
Rights Act of 1964 (42 U.S.C. Sec. 2000e), American women continue to
suffer disparities in wages that cannot be accounted for by age,
education, or work experience.
(b) California has prohibited gender-based pay discrimination
since 1949. While Section 1197.5 of the Labor Code started out to
redress the segregation of women into historically undervalued
occupations, it evolved over the last four decades, such that today
it is virtually identical to the federal Equal Pay Act of 1963 (29
U.S.C. Sec. 206(d)). The Equal Pay Act of 1963 also prohibits
sex-based wage differentials between men and women employed in the
same establishment who perform jobs requiring equal effort, skill,
and responsibility. The Equal Employment Opportunity Commission
enforces these provisions through a complaint process that is similar
to that which exists under California law. Civil actions are allowed
after administrative avenues are exhausted. Penalties allowed under
federal law are similar to those under California law, and include
recovery of an amount equal to the wages the aggrieved employee is
denied as a result of the gender-based pay disparity, plus an
additional equal amount as liquidated damages. A person who willfully
violates the federal law, however, is subject to a civil penalty not
to exceed one thousand dollars ($1,000) for each violation.
(c) Current state law requires an employer to maintain records for
two years of wages, wage rates, job classifications, and other terms
and conditions of employment of the persons employed by the
employer.
(d) Under state law, an employer who willfully violates Section
1197.5 of the Labor Code is guilty of a misdemeanor, and may be
punished by a fine of up to ten thousand dollars ($10,000), or by
imprisonment for not more than six months, or by both, except that a
prison term may not be imposed unless the employer has a conviction
for a prior violation.
(e) According to the United States Census Bureau, in 2002,
American women working full time, year around earned on average
seventy-six and three-fifths cents for every dollar earned by
full-time working American men. The inequity particularly affects
women of color, with African-American women earning sixty-five cents
($0.65) and Latinas earning only fifty-four cents ($0.54) for every
dollar paid to a white male worker.
(f) A General Accounting Office report on women's earnings shows
that there exists an inexplicable wage gap of approximately 20
percent even after taking into account work experience, education,
occupation, industry of current employment, and other demographic and
job characteristics. And, interestingly enough, the Institute for
Women's Policy Research found that a recent narrowing of the wage gap
between men and women was due in large part to men's real wages
falling, rather than women's wages rising.
(g) Despite federal and state laws that ban discrimination in pay
in both the public and private sectors, wage differentials persist
between women and men and between minorities and nonminorities in the
same jobs, and in jobs that require equivalent composites of skill,
effort, and responsibility, and working conditions.
(h) Wage discrimination not only harms individual women and people
of color, it also depresses living standards, contributes to higher
poverty rates among female-headed households, prevents the maximum
utilization of available labor resources, causes labor disputes that
burden commerce, and violates the state's express policy against
discrimination.
(i) Many occupations are dominated by individuals of the same sex,
race, or national origin, and discrimination in hiring, job
assignment, and promotion has played a role in establishing and
maintaining segregated workforces.
(j) Current remedies imposed on employers who practice
discrimination in pay between men and women, and between minorities
and nonminorities, have proven to be only partially effective in
eliminating such wage disparities.
(k) Understanding the full extent and causes of wage disparities
between men and women and between minorities and nonminorities in the
private and public sectors would enable the state to take more
effective measures to reduce and eliminate discrimination in wage
setting.
(l) States have been the source for innovative solutions for
narrowing the wage gap. In 1982, Minnesota implemented equal pay for
all public sector employees. In 2005, Hawaii prohibited gender-based
wage discrimination and established a pay equity task force to
recommend remedies for wage inequity. Maryland, too, has created a
commission to study disparities in pay between men and women and
between minorities and nonminorities. In 2003, Illinois enacted a law
prohibiting wage discrimination on the basis of gender, New Mexico
and Utah passed bills requiring pay equity studies, and West Virginia
created an equal pay commission.
(m) This act is enacted to protect the health and welfare of
California residents and improve the overall labor environment by
correcting and deterring discriminatory wage practices based on sex,
race, and national origin, developing reliable data about the extent
of such wage discrimination, and providing greater understanding
about its causes.
SEC. 2. Section 1197.5 of the Labor Code is amended to read:
1197.5. (a) No employer shall pay any individual in the employer'
s employ 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.
(b) Any employer who violates subdivision (a) is liable to the
employee affected in the amount of the wages, and interest thereon,
to which the employee is deprived by reason of the violation, in an
additional equal amount as liquidated damages, and in an amount equal
to twice the balance of the wages due the employee as a civil
penalty. If the employer is determined by a court to have violated
subdivision (a) willfully, the civil penalty to which the employee is
entitled shall be four times the balance of the wages due.
(c) Civil penalties recovered under subdivision (b) shall be
distributed to the Labor and Workforce Development Agency for the
enforcement of pay equity laws and the education of employees and
employers of their rights and responsibilities under pay equity laws.
(d) The provisions of this section shall be administered and
enforced by the Division of Labor Standards Enforcement. If the
division finds that an employer has violated this section, it may
supervise the payment of wages and interest found to be due and
unpaid to employees under subdivision (a). Acceptance of payment in
full made by an employer and approved by the division shall
constitute a waiver on the part of the employee of the employee's
cause of action under subdivision (i).
(e) Every employer shall maintain for a period of at least two
years records of the wages and wage rates, job classifications, and
other terms and conditions of employment of the persons employed by
the employer. The records shall be sufficient to document and support
the method, system, calculations, and other bases used to establish,
adjust, and determine the wage rates paid to each employee.
(f) Every employer of 50 or more employees shall provide to each
employee, upon commencement of the employment and at least annually
thereafter, a written statement setting forth the employee's job
title, wage rate, and an explanation as to how the employee's wages
are calculated. The employer shall provide the employee with an
updated statement whenever the employee is promoted or reassigned to
a different nontemporary position of at least three months' duration.
(g) Any employee may file a complaint with the division that the
wages paid are less than the wages to which the employee is entitled
under subdivision (a). The complaint shall be investigated as
provided in subdivision (b) of Section 98.7. The division shall keep
confidential the name of any employee who submits a complaint
regarding an alleged violation of subdivision (a) until the division
establishes the validity of the complaint, unless the division must
abridge the confidentiality in order to investigate the complaint. If
the employee withdraws the complaint, the division shall continue to
keep the employee's name confidential, unless confidentiality of the
name has already been abridged. The division shall take all
proceedings necessary to enforce the payment of any sums found to be
due and unpaid to these employees.
(h) The department or division may 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 under subdivision (a), in which the department or division
may recover costs of suit. The consent of any employee to the
bringing of any action shall constitute a waiver on the part of the
employee of the employee's cause of action under subdivision (i)
unless the action is dismissed without prejudice by the department or
the division, except that the employee may intervene in the suit or
may initiate independent action if the suit has not been determined
within 180 days from the date of the filing of the complaint.
(i) Any employee receiving less than the wage to which the
employee is entitled under this section may recover in a civil action
the amount of the wages, including interest thereon, to which the
employee is deprived, an equal amount as liquidated damages, and an
amount equal to twice the balance of the wages due the employee as a
civil penalty, together with the costs of the suit and reasonable
attorney's fees, notwithstanding any agreement to work for a lesser
wage. If the employer is determined by a court to have violated
subdivision (a) willfully, the civil penalty shall be four times the
balance of the wages due.
(j) A civil action to recover wages under subdivision (a) 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.
(k) If an employee recovers amounts due the employee under
subdivision (b), and also files a complaint or brings an action under
subdivision (d) of Section 206 of Title 29 of the United States Code
which results in an additional recovery under federal law for the
same violation, the employee shall return to the employer the amounts
recovered under subdivision (b), or the amounts recovered under
federal law, whichever is less.
SEC. 3. Section 1197.7 is added to the Labor Code, to read:
1197.7. (a) Within 90 days of the effective date of this section,
the Secretary of Labor and Workforce Development shall appoint a
commission of nine members known as the Equal Pay Commission.
(b) The membership of the commission shall be comprised of the
following:
(1) Two representatives of business in the state, appointed from
among individuals nominated by state business organizations and
business trade associations.
(2) Two representatives of labor organizations, appointed from
among individuals nominated by a state labor federation that admits
local unions as members and exists primarily to carry on educational,
legislative, and coordinating activities.
(3) Two representatives selected from organizations that seeks to
eliminate pay disparities between men and women and that have
undertaken advocative, educational, or legislative initiative in
pursuit of this objective.
(4) Three individuals, drawn from higher education or research
institutions, who have experience and expertise in the collection and
analysis of data concerning pay disparities, and whose research has
been used to promote the elimination of those disparities.
(c) The commission shall make a full and complete study of the
following:
(1) The extent of wage disparities, in both the public and private
sectors, between men and women and between minorities and
nonminorities.
(2) Those factors that cause, or tend to cause, these disparities,
including segregation of men and women, and minorities and
nonminorities, across and within occupations, payment of lower wages
for occupations traditionally dominated by women and minorities,
childrearing responsibilities, and education and training.
(3) The consequences of these disparities on the economy and on
affected families.
(d) The commission shall, no later than one year after its members
are appointed, report to the Legislature and to the Secretary of
Labor and Workforce Development, the latter of whom shall transmit
the commission's report to the Governor. The commission's report
shall include the results of its study as well as recommendations for
actions, including proposed legislation, to eliminate and prevent
disparities in wages between men and women and between minorities and
nonminorities.
(e) This section shall become inoperative on April 1, 2008, and, as
of January 1, 2009, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2009, deletes or
extends the dates on which it becomes inoperative and is repealed.