BILL ANALYSIS                                                                                                                                                                                                    





                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                             2015-2016  Regular  Session


          AB 676 (Calderon)
          Version: February 25, 2015
          Hearing Date: June 30, 2015
          Fiscal: Yes
          Urgency: No
          TMW


                                        SUBJECT
                                           
                 Employment:  discrimination:  status as unemployed

                                      DESCRIPTION  

          This bill, as of July 1, 2016, would prohibit an employer from  
          discriminating against prospective job applicants on the basis  
          of the applicant's employment status.  This bill would provide  
          that an employer, employment agency, or person operating an  
          Internet job posting Web site who discriminates against  
          unemployed job applicants would be subject to a civil penalty in  
          an amount not to exceed $1,000 for the first violation, $5,000  
          for the second violation, and $10,000 for each subsequent  
          violation, enforceable by the Labor Commissioner.

                                      BACKGROUND  

          Following the recent financial crisis that began in 2007,  
          millions of Americans are currently unemployed.  California has  
          an unemployment rate of 6.5 percent, compared to about 5.4  
          percent nationally.  Recently, reports are surfacing that many  
          employers are requiring, as a part of the job description, that  
          the applicant be currently employed.



          On February 16, 2011, the Equal Employment Opportunity  
          Commission (EEOC) held a public hearing to examine the impact of  
          employers considering only those currently employed for job  
          vacancies.  According to the EEOC Press Statement on the  
          hearing:








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            "Throughout its 45 year history, the EEOC has identified and  
            remedied discrimination in hiring and remains committed to  
            ensuring job applicants are treated fairly," said EEOC Chair  
            Jacqueline A. Berrien.  "Today's meeting gave the Commission  
            an important opportunity to learn about the emerging  
            practice of excluding unemployed persons from applicant  
            pools."

            According to Helen Norton, Associate Professor at the  
            University of Colorado School of Law, employers and staffing  
            agencies have publicly advertised jobs in fields ranging  
            from electronic engineers to restaurant and grocery managers  
            to mortgage underwriters with the explicit restriction that  
            only currently employed candidates will be considered.   
            "Some employers may use current employment as a signal of  
            quality job performance," Norton testified.  "But such a  
            correlation is decidedly weak.  A blanket reliance on  
            current employment serves as a poor proxy for successful job  
            performance."

            "The use of an individual's current or recent unemployment  
            status as a hiring selection device is a troubling  
            development in the labor market," said Fatima Goss Graves,  
            Vice President for Education and Employment of the National  
            Women's Law Center.  She noted that this practice "may well  
            act as a negative counterweight" to government efforts to  
            get people back to work.  Women, particularly older women  
            and those in non-traditional occupations, are  
            disproportionately affected by this restriction, testified  
            Goss Graves.

            Denying jobs to the already-unemployed can also have a  
            disproportionate effect on certain racial and ethnic  
            minority community members, Algernon Austin, Director of the  
            Program on Race, Ethnicity, and the Economy of the Economic  
            Policy Institute, explained.  Unemployment rates for  
            African-Americans, Hispanics and Native Americans are higher  
            than those of whites.  When comparing college-educated  
            workers, the unemployment rate for Asians is also higher.   
            Thus, restricting applications to the currently employed  
            could place a heavier burden on people of color, he  
            concluded.








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            The use of employment status to screen job applicants could  
            also seriously impact people with disabilities, according to  
            Joyce Bender, an expert in the employment of people with  
            disabilities.  "Given my experience, I can say without a  
            doubt that the practice of excluding persons who are  
            currently unemployed from applicant pools is real and can  
            have a negative impact on persons with disabilities," Bender  
            told the Commission.  (Equal Empl. Opportunity Com., Press  
            Release, Out of Work? Out of Luck:  EEOC Examines Employers'  
            Treatment of Unemployed Job Applicants at Hearing (Feb. 16,  
            2011)  [as of June 17, 2015].)


          Following increased media attention on discrimination against  
          unemployed workers in hiring practices, on July 12, 2011, the  
          National Employment Law Project (NELP) released a study which  
          found that, in one month, there were more than 125 online job  
          postings that required candidates to be "currently employed."   
          According to the study, "[s]ignificantly, the fact that NELP's  
          relatively limited research yielded such a broad cross-section  
          of exclusionary ads - with postings for jobs throughout the  
          United States, by small, medium and large employers, for white  
          collar, blue collar, and service sector jobs, at virtually every  
          skill level - suggests that the practice of excluding unemployed  
          job seekers could be far more extensive than depicted in this  
          limited sample."  (National Employment Law Project, Briefing  
          Paper, Hiring Discrimination Against the Unemployed (July 12,  
          2011) p. 2.)

          Recent legislation aimed at protecting unemployed individuals  
          seeking work was enacted in New Jersey, Oregon, and the District  
          of Columbia, which now prohibit employers from specifying in  
          print or Internet job advertisements that unemployed persons  
          will not be considered for hire.  New York City amended its  
          Human Rights Law, effective June 11, 2013, to define a job  
          applicant's unemployed status as a protected class along with  
          age, race, creed, color, national origin, gender, disability,  
          marital status, partnership status, sexual orientation, and  
          alienage/citizenship status and provides plaintiffs with the  
          right to pursue private civil claims.

          However, on the federal level, the Fair Employment Act of 2011,  
          the Fair Employment Opportunity Act of 2011, and the American  
          Jobs Act of 2011, were introduced and would have made it illegal  







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          for employers to discriminate based on employment status, but  
          that legislation was not enacted.  (See H.R. No. 1113, 112th  
          Cong., 1st Sess. (2011); H.R. 2501, 112th Cong., 1st Sess.  
          (2011); S. 1471, 112th Cong., 1st Sess. (2011); S. 1549, 112th  
          Cong., 1st Sess., Part III, Subtitle D (2011); H.R. 12, 112th  
          Cong., 1st Sess. (2011), Sec D.)



          Similarly, this bill would prohibit discrimination by an  
          employer based on a prospective job applicant's employment  
          status.  This bill is similar to AB 1450 (Allen, 2012), which  
          passed out of this Committee on a vote of 3-1 and was vetoed by  
          Governor Brown because he believed AB 1450 would lead to  
          unnecessary confusion.  This bill is substantially similar to AB  
          2271 (Calderon, 2014), which was vetoed because Governor Brown  
          believed it could impede the state's efforts to connect  
          unemployed workers to prospective employers, and that the bill  
          would not provide the proper path to helping unemployed  
          Californians get back to work.

          This bill was heard by the Senate Labor and Industrial Relations  
          Committee on June 24, 2015, and was approved by a vote of 4-1.

                                CHANGES TO EXISTING LAW
           
           Existing law  , the Fair Employment and Housing Act (FEHA),  
          prohibits, as a matter of public policy, discrimination and  
          harassment in employment on the basis of race, religious creed,  
          color, national origin, ancestry, physical disability, mental  
          disability, medical condition, genetic information, marital  
          status, sex, gender, gender identity, gender expression, age,  
          sexual orientation, or military and veteran status.  (Gov. Code  
          Sec. 12940 et seq.)

           This bill  would prohibit, unless based on a bona fide  
          occupational qualification, an employer from either:
           publishing in print, on the Internet or in any other medium,  
            an advertisement or announcement for any job that includes a  
            provision stating or indicating that an individual's current  
            employment is a requirement for the job; or
           affirmatively asking an applicant for employment to disclose,  
            orally or in writing, information concerning the applicant's  
            current employment status until the employer has determined  
            that the applicant meets the minimum employment qualifications  







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            for the position, as stated in the published notice for the  
            job.

           This bill  would prohibit, unless based on a bona fide  
          occupational qualification, an employment agency from doing any  
          of the following:
           publishing in print, on the Internet or in any other medium,  
            an advertisement or announcement for any job that includes a  
            provision stating or indicating that an individual's current  
            employment is a requirement for a job; 
           limiting, segregating, or classifying an individual in any  
            manner that may limit that individual's access to information  
            about jobs or referrals for consideration of jobs because of  
            the individual's employment status; and
           affirmatively asking an applicant for employment to disclose,  
            orally or in writing, information concerning the applicant's  
            current employment status until the employer has determined  
            that the applicant meets the minimum employment qualifications  
            for the position, as stated in the published notice for the  
            job.
           
          This bill  would prohibit, unless based on a bona fide  
          occupational qualification, a person who operates an Internet  
          Web site for posting jobs in this state from publishing on that  
          Internet Web site an advertisement or announcement for any job  
          that includes a provision stating or indicating that an  
          individual's current employment is a requirement for a job.

           This bill  would define "employer" to mean the state or any  
          political or civil subdivision of the state and any person who  
          directly or indirectly, or through an agent or any other person,  
          employs or exercises control over the wages, hours, or working  
          conditions of any person.

           This bill  would define "employment agency" to mean any person  
          who, for a fee or other valuable consideration to be paid,  
          directly or indirectly by a jobseeker, performs, offers to  
          perform, or represents it can or will perform employment  
          services, as specified, but would not include any employment  
          counseling service or any job listing service.

           This bill  would define "employment status" to mean an  
          individual's present unemployment, regardless of the length of  
          time the individual has been unemployed.








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           This bill  would not preclude an employer, employment agency, or  
          a person who operates an Internet Web site for posting jobs in  
          this state, or an agent, representative, or designee of that  
          employer, employment agency, or Internet Web site, from:
           publishing in print, on the Internet or in any other medium,  
            an advertisement or announcement for any job that contains any  
            provision setting forth qualifications for a job, including:   
            (1) holding a current and valid professional or occupational  
            license, certificate, registration, permit, or other  
            credential; (2) requiring a minimum level of education or  
            training or professional, occupational, or field experience;  
            and (3) stating that only individuals who are current  
            employees of the employer will be considered for that job;
           setting forth qualifications for any job or publishing in  
            print, on the Internet or in any other medium, an  
            advertisement or announcement for any job that contains any  
            provision setting forth qualifications for a job, including:   
            (1) holding a current and valid professional or occupational  
            license, certificate, registration, permit, or other  
            credential; (2) requiring a minimum level of education or  
            training or professional, occupational, or field experience;  
            and (3) stating that only individuals who are current  
            employees of the employer will be considered for that job;
           obtaining information regarding an individual's employment,  
            including recent relevant experience; 
           having knowledge of a person's employment status;
           inquiring as to the reasons for an individual's employment  
            status; 
           refuse to offer employment to a person because of the reasons  
            underlying an individual's employment status; and
           otherwise making employment decisions pertaining to that  
            individual.

           This bill  would prohibit an employer, an employment agency, or a  
          person operating an Internet Web site for posting jobs from  
          doing either of the following:
           interfering with, restraining, or denying the exercise of, or  
            the attempt to exercise, any right provided under this bill;  
            and
           discriminating against any individual because the individual:   
            (1) opposed any practice made unlawful; (2) has instituted, or  
            caused to be instituted, any proceeding; (3) has provided, or  
            is about to provide, any information in connection with any  
            inquiry or proceeding relating to any right provided; or (4)  
            has testified, or is about to testify, in any inquiry or  







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            proceeding relating to any right under this bill.

           This bill  would authorize an individual aggrieved by a violation  
          to file a complaint with the Labor Commissioner, who would be  
          authorized to impose a civil penalty against any employer,  
          employment agency, or person operating an Internet Web site for  
          posting jobs that the commissioner finds to be in violation. 

          This bill  would specify that an employer, employment agency, or  
          person operating an Internet Web site for posting jobs in  
          violation would be subject to a civil penalty of $1,000 for the  
          first violation, $5,000 for the second violation, and $10,000  
          for each subsequent violation.

           This bill  would provide that it does not create or authorize a  
          private right of action for a violation of its provisions.
           This bill  would become operative on July 1, 2016.

                                        COMMENT
           
          1.  Stated need for the bill  
          
          The author writes:
          

            Research shows that the long-term unemployed are frequently  
            overlooked and sometimes excluded from job opportunities.   
            Employers and employment agencies have posted job vacancy  
            notifications with language such as "No unemployed candidates  
            considered at all" or "Only currently employed candidates will  
            be considered." 



            The National Employment Law Project [(NELP)] has found that  
            the "falling unemployment rate and improving economic  
            conditions are not translating into adequate job opportunities  
            for millions of long-term unemployed job seekers."  A study  
            found that long-term unemployed workers with otherwise  
            identical resumes were called back for interviews at rates 45  
            [percent] lower than the short-term unemployed.



            Also, employers are disinclined to hire even well-qualified  







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            job applicants who have been out of work for six months or  
            longer.  Three Princeton economists found that only 11  
            [percent] of those unemployed for more than 6 months will ever  
            regain steady full-time work.



            California Statistics:  40.5 [percent] of the unemployed in CA  
            have been out of work for 27 weeks or longer.  214,800 people  
            in California lost their unemployment benefits on December 28,  
            2013 when the federal unemployment benefits lapsed and 836,100  
            will lose access to benefits through 2014.



            AB 676 will make sure that the unemployed are not unfairly  
            discriminated against and provide opportunities for unemployed  
            Californians to at least get their foot in the door and prove  
            to employers they are qualified and a good candidate for the  
            job.



            AB 676 would prevent employers, including state and local  
            agencies, or employment agencies from affirmatively asking an  
            applicant for employment to disclose information concerning  
            employment status until the employer or employment agency has  
            determined that the applicant meets the minimum employment  
            qualifications for the position.


            The bill will also prohibit an employer, employment agency, or  
            person who operates [an] Internet Web Site for posting jobs in  
            this state from publishing a job announcement or advertisement  
            containing a provision stating or indicating that an  
            individual's current employment is a requirement for the job,  
            unless based on a bona fide occupational qualification.

          2.  Discrimination protection for unemployed job seekers  


          As discussed during the February 26, 2011, public hearing held  
          by the Equal Employment Opportunity Commission (EEOC), there is  
          an emerging practice across the country of excluding unemployed  
          people from applicant pools.  (See Background.)  This bill seeks  







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          to address this problem by prohibiting an employer, an  
          employment agency, or a person operating an Internet Web site  
          for posting jobs in this state from discriminating against a job  
          applicant on the basis of the applicant's employment status.


          Under federal law, Title VII covers all public and private  
          employers with 15 or more employees, and prohibits employment  
          discrimination based on race, color, religion, sex, or national  
          origin, and applies to all aspects of the employment  
          relationship, including hiring, compensation, training,  
          benefits, working conditions, discipline, promotion, and  
          termination.  California law provides more expansive  
          antidiscrimination protections for employees under the Fair  
          Employment and Housing Act (FEHA), which prohibits  
          discrimination in employment on the basis of race, religious  
          creed, color, national origin, ancestry, physical disability,  
          mental disability, medical condition, genetic information,  
          marital status, sex, gender, gender identity, gender expression,  
          age, sexual orientation, or military and veteran status.  (Gov.  
          Code Sec. 12940 et seq.)

          Instead of adding employment status to the list of  
          antidiscrimination protections provided in FEHA, this bill would  
          create separate discrimination prohibitions for employment  
          status.  Although employees would not have the more expansive  
          level of protections and enforcement provisions that are  
          provided under FEHA, this bill would protect unemployed  
          individuals from discrimination while acknowledging an  
          employer's need to verify an individual's employment history as  
          well as the reasons for why he or she is unemployed.  Further,  
          the modest provisions of this bill are appropriate because most  
          employers consider this type of discrimination to be unnecessary  
          and would continue to refrain from engaging in such  
          discrimination.

          The California Labor Federation, AFL-CIO, in support, writes:

            The lingering economic downturn presents unemployed workers  
            with a wide variety of unique challenges:  our unemployment  
            rate hovers at over 6.7 [percent] - though the actual  
            percentage of workers unemployed and underemployed is much  
            larger - and those without jobs have found themselves idled  
            for historic lengths of time.  From 3 workers fighting over  
            every available job to the shifting demands of today's  







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            economy, it has never been harder to find stable, reliable  
            work.
            In addition, this most recent recession gave birth to a new  
            and particularly insidious form of discrimination.  Across the  
            country, many employers, employment agencies, and online job  
            websites have begun to openly advertise warnings like "no  
            unemployed candidates considered at all" or "must be currently  
            employed."  Creating a perverse catch-22, these corporations  
            require that you already have a job in order to get a job. . .  
            .

            AB 676 will help end this discrimination, whether in  
            advertisements or through hiring policies.  Employers will be  
            prohibited from inquiring about employment status before  
            assessing an applicant's qualifications, though an employer's  
            right to consider employment history will be explicitly  
            protected.

            This common sense reform simply ends blanket policies that  
            exclude qualified workers, and thus the bill only affects  
            employers currently engaging in the practice.  Meanwhile,  
            California's unemployed will face one less obstacle between  
            them and a successful return to the workforce.

          This bill would limit an individual's remedies against an  
          employer, employment agency, or person operating a job posting  
          Web site to an administrative procedure in which the individual  
          would file a complaint with the Labor Commissioner.  The Labor  
          Commissioner would then be authorized to impose civil penalties  
          based on the three-tier scheme created in this bill.  Unlike AB  
          1450, which would have created a private right of action against  
          the violating party, this bill would specifically prohibit a  
          private right of action.  Also unlike AB 1450, which would have  
          required an employer who contracts with a state agency to comply  
          with the bill and would have created a breach of contract and  
          grounds for contract termination for the employer's failure to  
          comply, this bill does not include contractors with the state or  
          provide for contract termination with the contractor who fails  
          to comply.

          3.  Governor Brown's vetoes of AB 1450 and AB 2271  

          This bill is similar to the enrolled version of AB 1450 (Allen,  
          2012).  In vetoing AB 1450, Governor Brown stated:








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            This measure seeks to prevent discrimination against the  
            unemployed based on their job status by prohibiting employers  
            from stating in employment ads that applicants must be  
            employed.  Unfortunately, as this measure went through the  
            legislative process it was changed in a way that could lead to  
            unnecessary confusion.

          This bill is also substantially similar to the enrolled version  
          of AB 2271 (Calderon, 2014).  In vetoing AB 2271, Governor Brown  
          stated:

            This bill would prohibit an employer from discriminating  
            against job applicants based on the applicant's status as  
            unemployed.  While I support the intent of this bill, it could  
                                                                                           impede the state's efforts to connect unemployed workers to  
            prospective employers as currently drafted.  The problems  
            facing our state's long term unemployed are great.  There is  
            no doubt that those Californians want to get back to work and  
            I want to help them get there - unfortunately this bill does  
            not provide the proper path to address this problem.


           Support  :  California Conference Board of the Amalgamated Transit  
          Union; California Conference of Machinists; California  
          Employment Lawyers Association; California Immigrant Policy  
          Center; California Labor Federation, AFL-CIO; California Nurses  
          Association; California Rural Legal Assistance Foundation;  
          California State Firefighters' Association; California Teamsters  
          Public Affairs Council; Engineers & Scientists of California;  
          Glendale City Employees Association; International Longshore &  
          Warehouse Union; Organization of SMUD Employees; National  
          Association of Social Workers, California Chapter; Professional  
          & Technical Engineers; San Diego County Court Employees  
          Association; San Luis Obispo County Employees Association;  
          Service Employees International Union; UNITE-HERE, AFL-CIO;  
          Utility Workers Union of America

           Opposition  :  None Known

                                        HISTORY
           
           Source  :  Author

           Related Pending Legislation  :  None Known








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           Prior Legislation  :

          AB 2271 (Calderon, 2014) See Background, Comments 2, 3.

          AB 1450 (Allen, 2012) See Background, Comments 2, 3.

           Prior Vote  :

          Senate Labor and Industrial Relations Committee (Ayes 4, Noes 1)
          Assembly Floor (Ayes 51, Noes 27)
          Assembly Appropriations Committee (Ayes 12, Noes 5)
          Assembly Labor and Employment Committee (Ayes 5, Noes 1)

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