MOORLACH UPDATE — Who Do You Answer To? — October 1, 2017

When assembling the 2017 top 20 worst bills going to the Governor’s Desk, there were some 15 that were “Who’s Your Daddy?” bills. I could only include a sampling (see MOORLACH UPDATE — 2017 Top 20 Veto Worthy Bills — September 22, 2017 september 22, 2017 john moorlach).

Nearly two years ago, I provided an extensive analysis of how the public employee unions run Sacramento (see MOORLACH UPDATE — Blame the Unions — November 9, 2015).

One of my biggest concerns in this posting was reiterated recently (see MOORLACH UPDATE — What Pension Crisis? — September 27, 2017). “The unions will say it wasn’t our fault. We didn’t vote for it. You guys [the elected officials] voted for it,” said Sen. Moorlach in an interview Monday.

Now that they have the supermajority in the Capitol, public employee unions have free rein in California. They are adding incrementally to their power by implementing law changes that will benefit them. I know that to the victor go the spoils. But, in a government structure, decreasing the tools management has is a strategic mistake. And, it will become apparent in an economic downturn, when cost savings need to be pursued in order to save current positions in an agency.

Greed blinds. And, as I’ve said on numerous occasions, when money talks the truth is silent.

One bill this year really showed the imbalance. It begged the question, “Who’s Your Daddy?” Major League Baseball fans will remember this chant and the accompanying clap routine (see https://www.youtube.com/watch?v=FRnVZoh2JFs). In fact, it even became a segment of a TBS MLB Post Season show (see https://www.youtube.com/watch?v=FRnVZoh2JFs).

The bill that set this chant in my brain this Session was AB 1250, which would greatly increase the cost to counties of personal-service contracts, sharply reducing help given to citizens, especially the poor. We introduced the consequences of the bill to you in this posting: MOORLACH UPDATE — Who’s Your Daddy? — July 1, 2017 . I provided the fun when I asked this very question in the Senate Governance and Finance Committee meeting with MOORLACH UPDATE — AB 1250 Labor Dominance — July 13, 2017.

The home team provided an editorial, with Orange County voicing its opposition in MOORLACH UPDATE — AB 1250 OC Opposition — September 5, 2017. I provided my own editorial, on the premise that AB 1250 was not being relegated to a two-year bill status and may be resurrected and show up at the last minute on the Senate Floor (it didn’t) in MOORLACH UPDATE Who Runs Our Government? September 14, 2017 .

When a budget trailer bill included an imposition on Tesla, a manufacturer with some 14,000 employees in the Fremont area, I had to ask again in MOORLACH UPDATE — Who Is? — September 13, 2017 .

By the final night of Session, one Democrat Senator made Bingo cards. The squares were words that may be spoken on the Floor. This is one way to while away the hours as this annual exercise drones on past midnight. I heard one square stated, “Sen. Moorlach says ‘Who’s Your Daddy?'” The chant had sunk in.

The OC Register provides the details of the union-assisting bills in my editorial submission provided in the first piece below.

The second piece is my Letter to the Editor of The Sacramento Bee. A common union tactic is to twist something. The headline of a recent post did just that
(see MOORLACH UPDATE — OC’s Newest Landmark Plaque — September 20, 2017). As Sacramento is brimming with current and retired state employees, the headline was inflammatory, when not factually accurate. So, I decided to provide a clarification. The good news? It was printed.

OPINION

California’s legislative Democrats answer to unions

By JOHN MOORLACH

http://www.ocregister.com/2017/09/30/californias-legislative-democrats-answer-to-unions/

This past year, many California legislators had the answer of who dominates them: the public-employee unions. Bill after bill, these wealthy unions showed who runs those under the Capitol dome, showing the unions own the supermajority Democrats in the Assembly and Senate.

When speaking on the Senate floor, I tried to identify a few of the most egregious bills the unions got the obedient Democratic Legislature to pass and we’ll soon find out if Gov. Jerry Brown will grant public employee union bosses more power to waste your hard-earned tax dollars and control your lives.

Even as the Legislature produced a housing bill package, the costs for prevailing wages and inclusionary zoning requirements were dramatically increased in Assembly Bill 73, by Assemblyman David Chiu, D-San Francisco, and AB 199, by Assemblyman Kansen Chu, D-San Jose.

Housing costs are a problem and teachers are just as impacted as other professionals. Rather than improve affordability for all, AB 45, by Assemblyman Tony Thurmond, D-Richmond, would give special housing privileges to teachers while also requiring expensive prevailing wages.

Currently, parents, friends and others who get paid helping out part-time on playgrounds are not unionized. AB 670, by Thurmond, would change that, pulling funds from the classroom and pouring them into the pockets of union leaders.

For the months school is not in session during the summer, AB 621, by Assemblyman Raul Bocanegra, D-San Fernando, gives custodians, school food workers and others without teaching or other professional credentials a back-door pay raise. It’s projected to cost schools up to $200 million a year in money that ought to go to teaching, pensions and retiree medical care.

The union shenanigans continue in higher education. Our public colleges and universities regularly contract out for specialty services that could be done more economically and effectively in the private sector. But that restricts union jobs.

So, why not find ways to hamstring the process with three bills? AB 168, by Assemblyman Evan Low, D-Campbell, would require “project labor agreements,” which reduce competition, thus increasing costs. AB 848, by Assemblyman Kevin McCarty, D-Sacramento, would ban outsourcing jobs to foreign countries — academic protectionism — costing up to $37.5 million a year from school budgets.

And AB 1424, by Assemblyman Marc Levine, D-Greenbrae, would make allowing “best value” contracting for University of California construction projects permanent, which reduces the importance of lowest-price bids, possibly increasing costs at a time of rising tuition.

For the bad teachers, AB 1651, by Assemblywoman Eloise Gómez Reyes, D-San Bernardino, further complicates the process of removing them.

Another union power-grab authored by Bocanegra is AB 1455, which would exempt collective bargaining documents between a local public agency and its employees from the Public Records Act. As a former Orange County supervisor, I can assure you that letting the public see what’s going on in negotiations is essential to clean, open government. But that’s precisely what the unions don’t want.

Home care aides are not so lucky in AB 1513, by Assemblyman Ash Kalra, D-San Jose, which would require the Department of Social Services to release their private information. This bill is not only a blatant invasion of privacy, but it’s also a shameless attempt by public employee unions to increase their membership.

As crime creeps back up after the passage of Propositions 47 and 57, AB 1320, by Assemblyman Rob Bonta, D-Alameda, would ban new or renewed contracts with private prisons in other states, and all such contracts by 2021. Without the flexibility to contract with out-of-state private prisons when inmate populations fluctuate, the estimated cost of the bill could be hundreds of millions of dollars. That’s legal robbery of taxpayers — all for the sake of in-state, union-operated prisons.

AB 83, by Assemblyman Miguel Santiago, D-Los Angeles, allows collective bargaining for the Judicial Council. And if court costs weren’t enough, expect additional fees on fines for traffic violations to pay for these union privileges.

We’ve had a lot of debate this year about increasing gas taxes and extending draconian cap-and-trade policies. Unions are out to get more advantages out of oil refineries who claim exemptions from the state’s skilled and trained workforce provisions in AB 55, by Thurmond, by using intimidation tactics with legitimate contracts signed years ago.

And, if you like cheaper, delicious customized food, AB 1461, by Thurmond, adds pointless red tape to give food unions an edge on the new gig economy for simply selling ingredients for meals people then cook at home. Federal law already covers these services.

Only one Democrat had the guts to vote against this power grab. Sen. Steve Glazer, D-Rio Linda, voted no on four of these bills. He looks for the union label. So should his colleagues.

Space is limited, but I could list more bills of this sort, compelling me to ask of the majority party: Who do you answer to? I thought so.

John Moorlach, R-Costa Mesa, is a state senator representing the 37th District.

LETTERS TO THE EDITOR

State pensions

http://www.sacbee.com/opinion/letters-to-the-editor/article176221491.html

Re “California pensioners: Your COLAs are safe, for now” (sacbee.com, Sept. 20): Reporter Adam Ashton’s article contained useful information regarding two letters I wrote to CalPERS in July, but parts of its text were misleading, as was the headline. The article said in one letter I asked CalPERS to look at reducing benefits for current workers and retirees by moving them into the less generous plans public agencies began offering in 2013 through the California Public Employees’ Pension Reform Act. The letters I sent were requests for actuarial data on the cost impacts of temporary cost-of-living freezes and moving classic employees into Pension Reform Act plans prospectively. The letters specifically pointed out the actions contemplated would not affect current employees or active members. Changing COLAs can only be done prospectively for people who are not currently retirees. As the Sept. 19 Finance Committee hearing at CalPERS showed, the pension crisis is getting worse for cities. Reviewing data is a critical step in assessing this most significant of fiscal concerns facing our state and its municipalities.

SEN. JOHN M.W. MOORLACH, R-COSTA MESA

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MOORLACH UPDATE — 2017 Top 20 Veto Worthy Bills — September 22, 2017

This is the third year that I have enjoyed the end of the Legislative Session, a grueling exercise where hundreds of bills are voted on in rapid succession and, with a few exceptions, very little Floor debate. And, for the third time, I have been invited by the FlashReport to list the 20 worst bills that on the Governor’s desk awaiting either a signature or a veto. For these 20, we’re definitely encouraging a veto (also see MOORLACH UPDATE — 2016 Veto Worthy Bills — September 12, 2016 september 12, 2016 john moorlach and MOORLACH UPDATE — Worst and Vaguest — September 22, 2015 september 22, 2015 john moorlach).

Last year we were permitted to provide the worst 25 bills. This year the list could have been double that. But, we were once again constrained to 20 bills the Governor should veto. We did not include some worthy bills as they have already been signed, as they either were voted on some time ago or were budget trailer bills Gov. Brown signed upon receipt.

I want to thank my Sacramento Capitol Office staff for doing an outstanding job of assisting me in my research on all the bills that came before me for a vote. I also want to thank them for their willingness to improve on our technologies to stay organized on the massive volume that occurs with the legislative process. With that, thank you Lance Christensen, my Chief of Staff, Eric Dietz, my Legislative Director, Robert Nash, my Legislative Analyst and electronic organizer par excellence. They kept my sanity intact the last few weeks.

I also want to thank Jacob Ashendorf, who served in my Capitol Office the past few months, but recently accepted a job offer in D.C. He is now my fifth staff member to join the Health and Human Services executive team. I don’t know whom to be mad at more, HHS Secretary Tom Price or President Donald Trump.

This year we also had the privilege of hosting a Capitol Fellow. James Moore, a Harvard grad who played basketball in high school, made me not feel tall. James was able to work a bill or two of mine to the Governor’s desk. So, that offensive experience on the court came in handy.

Now that we have a tradition, I’ll try to keep you posted on the status of these 20 bills in future UPDATEs.

bc2f75af-1bb0-4394-b7b3-b576ff825671.jpgFlashReport 2017 Top Bills Worthy Of The Governor’s Veto

Introduction from FlashReport Publisher Jon Fleischman

This is the 12th year that we have presented for your viewing displeasure the worst pieces of legislation sitting on the Governor’s desk. Of course there are a great many bills on the Governor’s desk – most of them worthy of a veto. Thus the task of trying to cull through those bills and single out just the twenty worst is not easy. For the second year in a row, our list comes to us courtesy of both State Senator John Moorlach and Assemblyman Matt Harper. I will add that this session in particular was over-the-top with noxious legislation, and limiting this list to twenty bills was no easy task. – Flash

The FlashReport Top 20 Bills Worthy Of The Governor’s Veto

As compiled and described by State Senator John Moorlach and Assemblyman Matthew Harper

Supermajority legislative leaders declared that the 2017 Session “may be the most productive and progressive legislative session in memory.” They may be right. And it’s only half done.

We don’t know if that is something to brag about, though. We believe that media perspectives describing 2017 as a rage reaction against the new Trump Administration are also accurate. From the first day of Session last December, the Democrats provided an anti-Trump resolution nearly every week and emphasized a strong move to the left on policies that will hurt California, prohibiting the state from leading the nation to prosperity.

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What was most stunning was how unabashed the public employee unions were in pushing through massive, if not coercive, requests to strengthen their declining membership numbers. AB 1250 was a brazen attempt to eliminate non-profits’ contracts and hand county services over to unions. Luckily, the non-profit world summoned enough strength to fight it off, at least until January. But in light of these union bills, it begged the question, “Who’s your daddy?”

Regretfully, our “Top 20” list is not comprehensive and does not include all the terrible bills the legislature has passed and the governor has signed this year. The gas-tax increase (SB 1) and cap-and-tax (AB 398) are already the law of the land.

There also were several bills we watched throughout the year to see if they were going to make it to final floor votes. Several didn’t.

Finally, the bills below are those that, despite our opposition, were affirmed by both the Senate and the Assembly and are going to the Governor’s desk. He has until October 15 to sign them – or prevent them from harming Californians by vetoing them. We present them to you in numerical order.

***

AB 20 (Kalra) Send Jobs, Not Investments to Dakota Bill: Paves the way for the California Public Employees Retirement System to “divesting” from valuable investments in the Dakota Access Pipeline. Doing so could reduce the value of CalPERS assets, endangering retiree pensions.

AB 168 (Eggman) Across the Board Salary Lowballing: Inhibits employers’ ability to hire qualified employees, prohibiting employers from using past salary information of a prospective employee as a factor in deciding whether to hire someone, or how much to pay them. This will lead to reduced production at a time when the state economy is starting to falter. Instead of helping employees, an unknown number of their jobs could be killed.

AB 199 (Chu) Construction Reduction Act: We should be avoiding government-mandated prevailing wages, not increasing their requirements. This legislation would significantly increase circumstances where prevailing wages would be mandated.

AB 569 (Gonzalez Fletcher) Discrimination of Church by State: Beyond limiting private religious organizations’ code-of-conduct policies for employees, it could bring the state into conflict with federal religious-rights legislation because it mandates that employers provide employee handbooks to include information on abortion coverage. That violates the religious conscience of many employers and employees.

AB 890 (Medina) Voter Suppression Act: This is anti-democratic and would silence voters pursuing pro-growth land-use decisions, usurping local control by mandating changes in local land use decision-making via state law.

AB 1008 (McCarty, Gipson, Holden, Reyes, Weber) Employment Meddling Act: This bill prohibits employers from inquiring about or using a prior criminal conviction of an prospective employee as a factor in whether to make them a conditional offer of employment. This is another bureaucratic hassle for businesses, increasing costs and, in the end, killing job opportunities because of increased legal liabilities and administrative burdens for employers.

AB 1209 (Gonzalez Fletcher) Women Employee Reduction Act: Gender discrimination already is against state and federal law. This would increase companies’ red tape in providing useless data about employee compensation to state busybodies, who would then post the information online. It could kill the jobs of the women it’s supposed to help.

AB 1269 (Mark Stone) Mobile Home Tax: This is a tax on mobile home parks and increases regulations on them. It could encourage owners to bulldoze the parks and turn them into condos.

AB 1274 (O’Donnell) Fee Hidden as a Tax: This is yet another car tax that is estimated to cost certain car owners over $100 million. The majority can’t get enough of car taxes.

AB 1455 (Bocanegra) Public Employee Bargaining Secrecy Act: How can we be reducing transparency? Yet this bill would prohibit local governments from sharing with the public documents concerning labor negotiations. We should be doing everything in our power to increase government transparency for our taxpayers.

AB 1461 (Thurmond) Are Food Handler Cards for Farmers Next?: Pointless red tape to give food unions an edge on the new “gig economy” by increasing the costs of doing business for companies that send food ingredients to your home for you to prepare.

AB 1513 (Kalra) Union Invasion of Privacy: Requiring that the Department of Social Services release private information of registered home care aides is a blatant invasion of privacy. It is also a shameless attempt by public employee unions to increase their membership.

SB 2 (Atkins) Killing Homes and Jobs for the Middle Class Act: Would raise taxes on real-estate transactions (by hundreds of millions of dollars annually), thereby discouraging home purchases.

SB 3 (Beall) California Legislature’s Housing Sub-Prime Act: Another massive, unneeded multi-billion dollar bond measure that doesn’t address or solve the underlying issues of housing supply or costs. It just creates more debt for the state for generations to come for homes they won’t be able to afford.

SB 5 (De Leon) Park Bond Boondoggle: Who doesn’t want more parks? But at $6.5 billion for principal and interest, that’s $235 million a year removed from the General Fund. Voters just enacted the Proposition 1 water bond in 2014. Let’s wisely spend all that money first. A review of this bill shows pork-barrel spending at it’s finest.

SB 54 (De Leon) Sanctuary State Nonsense: California has prioritized defiance to the federal government over its duty to govern responsibly and protect its citizens. If signed, this bill could cost the state and local governments hundreds of millions of dollars in public safety grants, establishing a state mandate that state and local governments may not assist federal immigration authorities as they attempt to find and detain illegal aliens. This is showmanship for the cameras, not leadership for the people.

SB 63 (Jackson) Small Business Meddling Act: It goes without saying that allowing new parents to bond with a child is very important and the state has a number of paid and unpaid benefit programs to provide for that leave. This bill requires that a an employer with 20 or more employees to provide up to 12 weeks of job-protected leave within one year of the child’s birth. And employers must maintain the employee’s group health coverage during that leave. There should be concern about the impact of this heavy-handed requirement on small businesses and the potential liability that could result.

SB 149 (McGuire, Wiener) Do As I Say, Not As I Disclose: This Constitutionally-dubious legislation would preclude a candidate for President from being placed on the California ballot if they have not publicly disclosed their tax returns – yet another dig on President Trump. It’s disingenuous to limit disclosure of tax documents to only presidential candidates. Why not all elected officials attempting to get on the ballot in California? This didn’t seem to be an issue in 2010 or 2014 when Governor Brown did not release his own tax returns.

SB 239 (Wiener) HIV Assault Act: Although strides have been made in HIV and AIDS treatment, those infected still can die. So intentionally infecting someone is as serious as assault and battery and even homicide, and should retain similar penalties. This legislation reduces this crime from a felony to a misdemeanor.

SB 285 (Atkins) Bargaining Meddling Act:Federal and state laws already guarantee the right to collective bargaining. The author claims this bill extends that right “to employees who are choosing whether or not to become or remain union members.” But it’s really redundant and would just increase costs for local governments, reducing services to the public.

This column can be found here. Please feel free to share on social media.

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MOORLACH UPDATE — Voting Strategies — September 10, 2017

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

http://www.ocregister.com/2017/09/07/previous-salary-soon-the-question-might-be-illegal/

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.”

National push

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.

Federal loopholes

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.

Business opposition

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.

Cause celebre

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.

YES

Assembly member Sharon Quirk-Silva (D-Fullerton), also represents Buena Park, Cypress, La Palma and part of Anaheim

NO

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

ABSENT

Assembly member Tom Daly (D-Anaheim), also represents Garden Grove and parts of Orange and Santa Ana

File Item #2

AB 168 (Eggman)

Oppose

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)
(NO: Stone)
Senate Public Employment and Retirement: xx-xx (7/10/17)
(AYE:; NO:; ABS:)

Vote requirement: 21

Version Date: 06/06/2017

Quick Summary

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.

Analysis
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.”

Other Issues:
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.”

 

Digest
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.

Background
Existing Law:
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:

  1. 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.”
  2. 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.
  3. 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.”

Related Legislation
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.

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