The OC Register provides an in depth analysis, in their piece below, of the subject broached by AB 168 and concludes with my vote in the Senate Public Employment and Retirement Committee (PE&R) meeting of July 10, where the bill passed onto the Senate Floor with a vote of 3 to 2 (also see MOORLACH UPDATE — Budget and House of Origin Deadlines — June 1, 2017).
Let me use this as a teaching opportunity to give you an inside look at what I do in determining how to vote on the hundreds of bills that come before me. First, I start with the application of my conservative principles, values and convictions (something I will discuss more in the months to come). But, I also rely on numerous sources of information.
Directly below the OC Register piece is the Republican Floor Commentary on AB 168. It is the “insider” research that the Republican Caucus receives from a small staff of analysts near the Capitol. I’m not really sure if it is confidential, but I’ll take the risk of providing it so you can see the quality of workmanship that is at my disposal.
I also receive a commentary on the bill from the PE&R Committee staff. We also receive letters and e-mails that are stored in the electronic drop box for my office’s review. To not make this UPDATE overly lengthy, I have not included them below.
Based on all of this data, I receive a condensed briefing from one of my Legislative Staff members providing their analysis and recommendation on what I should consider for casting my vote. In the case of AB 168, my Legislative Director, Eric Dietz, provided his thoughts, which are provided at the bottom below.
I review this material and then make a decision. I then listen as attentively as possible to presentations and debates in Committee or on the Floor. And, yes, after taking everything in, there are times when I will disagree with my staff and Caucus recommendations. In the case of AB 168, I agreed with the Caucus “prediction” of “Oppose” (it is not a recommendation or a demand) and with Eric’s analysis for my Committee vote. I almost always stay consistent with my committee votes when on the Floor, but there are occasions where the Floor debate has moved me to change my mind. But, it looks like I’ll be opposed to AB 168 when it is addressed on the Senate Floor this week.
Why? Well, Gov. Brown vetoed a similar bill two years ago. Industry groups that I respect, like the California Chamber of Commerce and the California State Association of Counties, are opposed to the bill. And, the Capitol is the worst offender of wage discrimination. All salary data is public, so trying to eliminate this data is next to impossible. And, ironically, the Capitol on average pays men higher wages than women and doesn’t even practice what it preaches. Even more ironic is that Senate Rules will not allow a new employee to receive a starting salary that is more than 10 percent over their former salary, regardless of employer. Go figure!
Wait, now that I’m on this topic and last week I lost my fifth staff member to D.C., my office has come to fully understand the joys of working with Senate Rules in the hiring process.
In hiring new employees, my chief of staff is not allowed to ask about previous salaries, which make negotiations very difficult for both the men and women applicants (and the AB 168 redundant). We’ve had women applicants with advanced degrees and professional certifications that we’ve had to artificially restrict their salary to the first 3 steps of a multi-step range, despite their credentials. Why? Absurd bureaucratic rules all in the name of fairness. How am I supposed to recruit and retain highly qualified females with these arbitrary rules?
How can I pay them what they’re worth under these well-intended, but naive proposals? I can’t, and good public policy suffers when I constantly lose excellent employees — not to the private sector here in California — but to other states where their hiring policies are less restrictive all around.
I’d like to pay the very talented and experienced women (and men, for that matter) who work for me what they are worth. But I can’t, even within the budget I’m allotted. And now my busybody legislative colleagues only want to make it worse for you, too. (There — I vented — thanks.)
The final thing that I bring to the decision process is my past work history. As a former managing partner of a large local Certified Public Accounting firm, as the former head of a county department (where some 75 percent of my staff were female), and as a former Supervisor for the sixth most populous county in the nation, I bring plenty of real life experiences to the table. I could regale you with stories directly related to this bill, but this UPDATE is already lengthy enough.
So, for me, to limit the data that is customary to the recruitment and hiring process is not an appropriate burden to place on businesses. The root of the problem is that public employee unions want the private sector to be run as if everyone was a union member. Where everyone receives the same salary. But, people are not the same and bring different skill sets and natural talents to their jobs. And they should be compensated based on the entire package they provide. Unions want cookie cutter strategies where everyone is treated the same. Unfortunately, cookie cutter environments breed mediocrity. And this is one step down that sad path.
I hope this gives you a flavor of why I spend so much time reading the materials provided in order to make, hopefully, informed votes. It will also explain why I find some bills worthy of addressing on the Senate Floor, either because they are really bad, or on occasion, really good. I am selective on which bills to comment on, as time is limited. And the next five days will find us on the Senate Floor every day, as there are more than 300 bills to address by Friday’s deadline.
Previous salary? Soon, the question might be illegal
By mroosevelt | OCR
You apply for a new job, and a prospective employer asks for your previous salary.
Intrusive? Harmless? No matter–the question soon could be illegal in California.
And its demise would be applauded by many women who say that basing salaries on prior compensation means discrimination can follow them from job to job.
“Women are paid less than men, even when they are doing the same work,” said California Assembly member Susan Talamantes Eggman (D-Stockton), author of a bill to bar employers from seeking applicants’ salary history.
“Women negotiating a salary shouldn’t have to wrestle an entire history of wage disparity. This bill gives women the power to determine for themselves where they start negotiating.”
The legislation, AB 168, applies to both men and women, but it is aimed at narrowing the gender pay gap. According to the U.S. Census, California women earn 84 cents for every dollar a man is paid, slightly more than the U.S. average of 79 cents.
The measure passed the Assembly 60 to 9 in May and is expected to be voted upon by the Senate next week.
Whether Gov. Jerry Brown would sign it is unclear. He vetoed a similar bill two years ago, after opposition from business groups, saying it would prevent employers “from obtaining relevant information with little evidence that this would assure more equitable wages.”
Since then, however, the movement for salary privacy has gathered strength across the country. Three states — Massachusetts, Oregon, and Delaware — have enacted laws to stop employers from asking the question. Twenty-five states considered bills this year. Illinois and New Jersey legislatures are considering whether to override gubernatorial vetoes.
Cities are also jumping into the fray, with San Francisco, New York, Philadelphia and Pittsburgh passing ordinances forbidding past salary inquiries.
And now, the momentum in California is boosted by bipartisan support. Whereas the measure vetoed by Brown in 2015 failed to garner a single G.O.P. vote, this year’s legislation was co-authored by two Republicans and passed the Assembly with 10 G.O.P. votes.
“As a business owner, I know the value of a job in my business,” said co-author Marie Waldron (R-Escondido) whose district spans parts of Riverside and San Diego Counties and who co-owns a small screen-printing company.
“A job is worth what it is worth. It should not be used as a moving target to pay qualified women less, due to their past history.”
The bill would also requires employers to furnish applicants, upon request, the pay scale for a position.
Gender pay discrimination has been illegal since 1963, when women earned 59 cents on the dollar compared to men and President John F. Kennedy signed the federal Equal Pay Act.
But while the gap has narrowed, loopholes in the law have allowed discrimination “even between men and women in the same fields and with the same levels of education,” Eggman said.
“The systematic under-compensation of women is compounded by the use of historic salary history in determining the basis of negotiation for women seeking new work.”
Two years ago, Gov. Jerry Brown signed the California Fair Pay Act, a sweeping law requiring employers to pay men and women equal salaries for “substantially similar” work. A subsequent measure has made it illegal to base compensation solely on that worker’s past salary.
But equal pay advocates view laws preventing an employer from even asking about past salary as a new tool to “stop discrimination before it happens,” said Kate Nielson, state policy analyst for the American Association of University Women.
“Other laws require someone who is discriminated against to take (legal) action. That takes time and money that many don’t have,” Nielson said.
Even with federal and state laws banning wage discrimination, a study by the Institute for Women’s Policy Research suggests that at the current pace of change the gender wage gap in the United States will not close until 2058.
Supporters of AB 168 include the California Federation of Teachers, the Consumer Federation of California, the California chapter of the National Association of Social Workers and the Service Employees International Union, among others.
Although backers have focused on gender disparities, the legislation could also affect people of color who may have experienced wage discrimination in earlier jobs. Younger workers who settled for low-paying positions during the recession, despite their qualifications for higher salaries, could also benefit.
However, the groups opposing the salary privacy measure are powerful. The Chamber of Commerce, a force in Sacramento, has marshaled a broad coalition, including trade associations of builders, farmers, grocers, hotels, insurers, restaurants and retailers, along with the California State Association of Counties, the League of California Cities and local chambers in Irvine and Riverside.
“The bill exposes all employers to unnecessary litigation, creates hurdles in the hiring process and is already addressed by existing law,” the groups wrote in a July letter of opposition.
“There are actually several legitimate, non-discriminatory reasons why employers seek information regarding prior compensation of an applicant. Employers do not necessarily have accurate wage information on what the current market is for all potential job positions.”
Despite the business push, just a single Assembly member, Matthew Harper (R-Huntington Beach), spoke against the bill during the May floor debate. “All this bill simply does is reduce transparency and reduce information in terms of what employers need to make good hiring decisions,” he said.
Meanwhile, as California seems poised to enact a salary privacy measure, a landmark federal lawsuit over the same issue is coming to a head.
Last month, the full Ninth Circuit Court of Appeals agreed to hear the case of a mathematics consultant for Fresno public schools who discovered she was paid less than male colleagues based purely on her prior salary.
In 2009, Aileen Rizo, who had two master’s degrees in mathematics and technology, was hired at the minimum starting pay for a Fresno educator in her category: $62,733.
Three years later, she learned by chance that a newly-hired male colleague was earning thousands of dollars more, although she had started with more education and more experience. Asking around, she found two other male colleagues who had also started at higher salaries.
Rizo, whose expertise was training instructors in new ways of teaching math, confronted her bosses. But they refused to raise her pay, saying it was legitimately based on the salary she had earned at a previous job in Arizona.
Rizo sued, arguing that the federal Equal Pay Act outlaws paying men and women different salaries for the same job. The Fresno school system has fought back, maintaining that pegging pay to previous earnings is gender-neutral.
In April, a 9th Circuit panel overturned a district court decision favoring Rizo. But her lawyers persuaded the full court to reconsider, arguing that basing pay solely on prior salary “perpetuates the history of gender bias in American society, contrary to the explicit purpose of the Equal Pay Act.”
Rizo’s case has become a cause célèbre. She was interviewed on NBC by Maria Shriver. National unions, women’s groups and civil rights organizations have filed amicus briefs on her behalf.
“I couldn’t educate myself out of being paid less,” Rizo testified at a California Senate hearing in June. “I couldn’t get more experience to break the cycle because low wages follow you wherever you go, as long as someone keeps asking you what you were paid.”
More than 50 years have passed since the Equal Pay Act was signed, she noted, “and we’ve been waiting for the discriminatory wage gap to close…Haven’t we been waiting long enough?”
HOW ORANGE COUNTY LEGISLATORS VOTED ON SALARY PRIVACY BILL
Here is how Orange County legislators voted when the bill passed the Assembly 60 to 9, and when it was voted on by a Senate committee.
The bill is expected to come before the full Senate next week.
Assembly member Sharon Quirk-Silva (D-Fullerton), also represents Buena Park, Cypress, La Palma and part of Anaheim
Assembly member Travis Allen (R-Huntington Beach) also represents Fountain Valley, Garden Grove, Los Alamitos, Seal Beach and Westminster
Assembly member William Brough (R-Dana Point) also represents Aliso Viejo, Laguna Hills, Laguna Niguel, Mission Viejo, Rancho Santa Margarita, San Clemente, San Juan Capistrano
Assembly member Phillip Chen (R-Diamond Bar) also represents Brea, La Habra, Placentia and Yorba Linda
Assembly member Steven Choi (R-Irvine), also represents Lake Forest, Tustin, Villa Park and parts of Anaheim, Orange and Santa Ana
Assembly member Matthew Harper (R-Huntington Beach), also represents Costa Mesa, Laguna Beach, Laguna Woods, Newport Beach and part of Irvine
Senator John Moorlach (R-Costa Mesa), also represents Anaheim, Huntington Beach, Irvine, Laguna Beach, Laguna Woods, Lake Forest, Newport Beach, Orange and Tustin
Assembly member Tom Daly (D-Anaheim), also represents Garden Grove and parts of Orange and Santa Ana
File Item #2
AB 168 (Eggman)
Assembly Floor: 60-9 (05/22/2017)
(AYE: Acosta, Baker, Chávez, Cunningham, Dahle, Flora, Lackey, Maienschein, Mathis, Steinorth, Voepel, Waldron; NO: Travis Allen, Brough, Choi, Gallagher, Harper, Melendez, Obernolte, Patterson; ABS: Bigelow, Chen, Fong, Kiley, Mayes)
Senate Labor and Industrial Relations: 4-1 (6/14/17)
Senate Public Employment and Retirement: xx-xx (7/10/17)
(AYE:; NO:; ABS:)
Vote requirement: 21
Version Date: 06/06/2017
Prohibits all employers (including state and local governments and the Legislature) from seeking salary history information about or from a job applicant. Requires all employers to provide pay scale information to job applicants upon request.
Note: A substantially similar measure, AB 1017 (Campos), passed out of the Legislature in 2015 with all current Senate Republicans voting “NO.” It was later vetoed by Governor Brown who said in part, “This bill, however, broadly prohibits employers from obtaining relevant information with little evidence that this would assure more equitable wages.”
Republican Assemblymembers Mathis and Waldron are coauthors.
Arguments in Support:
This bill is purported to be an effort to address intentional gender based wage discrimination. The author cites statistics that are often quoted in regards to a wage gap as support for this bill.
According to the author, “Gender wage discrimination is destructive not only for female workers but for our entire economy. Closing the wage gap starts with barring employers from asking questions about salary history so that previous salary discrimination is not perpetuated.”
Arguments in Opposition:
Generally Speaking: This measure would expand opportunities to sue a boss, further establishing California as the #1 Judicial Hellhole. It would also make the hiring process even more difficult, which negatively effects job creation. Finally, it is unnecessary because gender pay discrimination is already addressed by existing law in a number of different ways.
Faulty Premise?: This bill is based upon the premise that there is a significant gender based wage gap caused by intentional gender based wage discrimination on the part of employers. It is important to note that empirically sound critiques of the various studies cited as justification for this measure exist that suggest otherwise (see Other Issues and Background sections below for an alternative explanation for the wage gap).
Further, under both state and federal law, gender based wage discrimination is prohibited, so it is unclear as to how employers could get away with such discrimination. Moreover, if employers could get away with paying women less, they would have a significant incentive to hire only women. Obviously this is not happening, so either employers are not acting in their own self-interest, or maybe there are other explanations for any pay differentials that do exist.
Unnecessary & Inappropriate Government Intervention…Undermining the Purpose of an Interview!: This is one in a long line of bills in which the Government is inappropriately and unnecessarily interfering in the relationship between employers and job applicants. There is no justification for such interference. An employer ought to be able to ask non-discriminatory questions to job applicants in order to determine whether a person is the right fit for the job. That is the purpose of an interview. Asking about salary is an important question for determining fit. This bill will only make it more difficult for an employer and applicant to determine whether the applicant is the right fit during the interview process.
A Legitimate and Non-discriminatory Question: According to the coalition of employer representatives opposed to this measure, “There are actually several legitimate, non-discriminatory reasons why employers seek information regarding prior compensation of an applicant. Employers do not necessarily have accurate wage information on what the current market is for all potential job positions. In fact, employers in competitive industries do not advertise salaries in order to utilize their pay structure as a way in which to lure talented employees from their competition. By requesting salary information, employers can adjust any unrealistic expectations or salary ranges to match the current market rate for the advertised job position. This has worked to the benefit of the applicant/employee. Additionally, it can be utilized as a reference regarding whether the employee’s expectations of compensation far exceed what the employer can realistically offer. Requiring both the applicant and employer to waste time on the interview process which, for highly compensated employees, could be lengthy, to then ultimately learn at the end of the process that the employee would never consider taking the compensation offered is unnecessary.”
Facilitating the Creation of Unhelpful, Artificial and Potentially Unrepresentative Pay Scales: According to the coalition of employer representatives opposed to this measure, “While AB 168 allows an employee to request a pay scale for the specific position, that mandate raises concerns as well. As set forth above, an employer may assume a pay scale accurately captures the current market for a specific position, yet could be wrong. Disclosing a pay scale could artificially limit an applicant’s interest in a position. Employers determine the appropriate wage and salary to pay an applicant based upon various factors, including skill, education and prior experience, as well as the funding available for the job. Employers may feel compelled to enlarge the pay scale in order to create sufficient room to adjust that rate depending on the various factors and varied candidates for the job. Such a broad pay scale will not assist an applicant in negotiations.”
Unnecessary: This bill is unnecessary, as there are already ample protections and remedies in existing law for gender based wage discrimination. In fact, Senate Republicans unanimously supported AB 1676 (Campos), a bill enacted last year to clarify that prior salary cannot, by itself, justify any disparity in compensation. Additional protections include:
- Labor Code Section 1197.5 which was just amended by SB 358 (Jackson) in 2015 to mandate an employer provide equal wages for substantially similar work.
- Labor Code Section 232 which precludes an employer from preventing an employee from disclosing his or her wages.
- The Fair Employment and Housing Act (FEHA) precludes any discrimination in the workplace based upon various protected classifications, including gender.
Yet Another Opportunity to Sue a Boss (or Potential Boss): This bill amends the Labor Code. As such, any violation of its provisions whether inadvertent or intentional and irrespective of whether there is any harm done could result in a Private Attorneys’ General Act (PAGA) lawsuit, attorneys’ fees and significant penalties. The last thing that employers need is more opportunities to be sued. Further, California over the past several years has been ranked as #1 or #2 on the American Tort Reform’s list of the nation’s top “Judicial Hellholes.” This bill will help to ensure that California remains on the top of this ranking.
According to the coalition of employer representatives opposed to this measure, “…Exposing employers to additional threats of litigation, even when the employer pays an applicant equal wages as other employees, is simply unfair. For example, under AB 168, if an employer asks an employee about his or her prior salary, yet ultimately pays the applicant a higher salary than any of the applicant’s male colleagues, that employer could still be sued under PAGA for penalties and attorney’s fees. It is unfair to expose employers to this costly litigation, especially when no harm has occurred to the individual applicant or employee.”
Alternative Explanation for a Gender Wage Gap: When considering statistics that do show the existence of a gender pay gap, it is important ask if there might be another explanation for this than intentional discrimination on the part of the employer. Often times the statistics that are cited as evidence for the gender wage gap come from reports and studies that lack empirical soundness in that they do not control for important factors other than intentional gender based wage discrimination. In fact, some of these reports create categories of jobs for comparisons and then lump into the categories jobs that have very different pay scales, are extremely different and may be more attractive to one gender than the other. For example, one such study reported a sizable wage gap in the social sciences. The social sciences include such diverse college majors as sociology and economics. Sociologist generally make considerably less than economists. Also, generally speaking more sociologists are women, while more economists are men. Consequently, in the social sciences, individual choice rather than discrimination may be a better explanation for the wage gap. (see Wage Gap When Controlling for Relevant Factors bullet below for more)
In fact, according to Christina Hoff Sommers is a resident scholar at the American Enterprise Institute, “One of the best studies on the wage gap was released in 2009 by the U.S. Department of Labor. It examined more than 50 peer-reviewed papers and concluded that the 23-cent wage gap “may be almost entirely the result of individual choices being made by both male and female workers.”
Prohibits an employer from seeking salary history information about an applicant for employment.
Specifies that the bill shall not apply to salary history information disclosable to the public pursuant to federal or state law, including the California Public Records Act or the federal Freedom of Information Act. Requires an employer to provide pay scale information to the job applicant upon request.
Applies the prohibition to state and local government employers, including the Legislature.
1) Provides that prior salary cannot, by itself, justify any disparity in compensation.
2) 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 for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.
3) Establishes exceptions to this prohibition 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.
4) Amends the Equal Pay Act to prohibit employers from paying employees a wage rate less than the rate paid to employees of a different race or ethnicity for substantially similar work.
5) Makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions.
The Wage Gap When Controlling for Relevant Factors:
- The American Enterprise Institute (AEI) reports that the “American Association of University Women (AAUW) has now joined ranks with serious economists who find that when you control for relevant differences between men and women (occupations, college majors, length of time in workplace) the wage gap narrows to the point of vanishing. The 23-cent gap is simply the average difference between the earnings of men and women employed ‘full time.’ What is important is the ‘adjusted’ wage gap—the figure that controls for all the relevant variables.”
- When controlling for some of the relevant differences, the AAUW report found an actual wage gap of 6.6-cents. AAUW notes that part of the new 6.6-cent wage-gap may be owed to women’s [reportedly] inferior negotiating skills—not unscrupulous employers.
- AEI reports that, “AAUW researchers count ‘social science’ as one college major and report that, among such majors, women earned only 83 percent of what men earned…That may sound unfair…until you consider that ‘social science’ includes both economics and sociology majors.” According to AEI, “Economics majors (66 percent male) have a median income of $70,000; for sociology majors (68 percent female) it is $40,000.” AEI cites Economist Diana Furchtgott-Roth of the Manhattan Institute who has pointed to similar incongruities. According to Furchtgott-Roth, “The AAUW study classifies jobs as diverse as librarian, lawyer, professional athlete, and ‘media occupations’ under a single rubric—‘other white collar.’ So, the AAUW report compares the pay of male lawyers with that of female librarians; of male athletes with that of female communications assistants. That’s not a comparison between people who do the same work.” AEI concludes that “with more realistic categories and definitions, the remaining 6.6 gap would certainly narrow to just a few cents at most.”
AB 1676 (Campos) Chapter 856, Statutes of 2016 requires that prior salary shall not, by itself, justify any disparity in compensation. All current Senate Republican Members voted “AYE.”
SB 1063 (Hall) Chapter 866, Statutes of 2016 expands the opportunity to sue employers by unnecessarily expanding the California Equal Pay Act to include race or ethnicity. All current Senate Republican Members voted “NO,” except Senator Wilk, who voted “AYE,” as an Assemblyman.
SB 358 (Jackson) Chapter 546, Statutes of 2015 purported to strengthen the California Equal Pay Act by, among other things, mandating that an employer provide equal wages for substantially similar work and by placing a greater burden of proof on employers accused of intentional wage discrimination. All current Senate Republican Members voted “AYE.”
AB 1017 (Campos) of 2015 was similar but not identical to AB 168. Governor Brown vetoed the measure saying in part, “This bill, however, broadly prohibits employers from obtaining relevant information with little evidence that this would assure more equitable wages.” All current Senate Republican Members voted “NO.”
Support & Opposition Received
Support: California Federation of Teachers, Consumer Attorneys of California, Consumer Federation of California, National Association of Social Workers , Women’s Foundation of California
Opposition: California Chamber of Commerce; American Insurance Association; California Ambulance Association; California Association for Health Services at Home; California Building Industry Association; California Employment Law Council; California Farm Bureau Federation; California Grocers Association; California Hotel and Lodging Association; California Landscape Contractors Association; California League of Food Processors; California Manufacturers and Technology Association; California Professional Association of Specialty Contractors; California Restaurant Association; California Retailers Association; California State Association of Counties; California Travel Association; Chambers of Commerce Alliance Ventura & Santa Barbara Counties; Civil Justice Association of California; Greater Riverside Chambers of Commerce; League of California Cities; National Federation of Independent Business; San Jose Unified School District, Vacaville Chamber of Commerce; Western Electrical Contractors Association; Western Growers Association; Wine Institute
Senate Republican Policy Office/Cory Botts, Scott Seekatz
Staff recommendation: OPPOSE
Staff Reasoning: Introduced to address gender based wage gap, and it is extremely surprising that state and local governments (including the legislature) were included in this bill.
Among many other issues with this bill are the PAGA complications. This bill could potentially trigger PAGA, making it much easier for employees to sue their bosses.
Governor Brown vetoed a similar measure in 2015. His veto message mentioned that he does not believe a measure like this would assure equitable wages.
Although they did not send their position letters to our office, many businesses are opposing this bill.
This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District.If you no longer wish to subscribe, just let me know by responding with a request to do so.
Follow me on Facebook & Twitter @SenatorMoorlach.