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<ns0:ActionText>FILED</ns0:ActionText>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Limón</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_OPPOSITE">(Coauthor: Assembly Member Kalra)</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Limón</ns0:Name>
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<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Kalra</ns0:Name>
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<ns0:Title>An act to amend Sections 432.3 and 1197.5 of the Labor Code, relating to employment. </ns0:Title>
<ns0:RelatingClause>employment</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Employment: payment of wages.</ns0:Subject>
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<ns0:DigestText>
<html:p>Existing law imposes varying requirements upon employers to share the pay scale for a position with an applicant or in a job posting, as provided. Existing law defines “pay scale” as the salary or hourly wage range that the employer reasonably expects to pay for the position.</html:p>
<html:p>This bill would revise the definition of “pay scale” to mean an estimate of this expected wage range that an employer reasonably expects to pay for the position upon hire and is made in good faith.</html:p>
<html:p>Existing law prohibits an employer from paying its employees at wage rates less than the rates paid to employees of the opposite sex or another race or ethnicity for substantially similar work, except under specified circumstances. Existing law requires a civil action to recover wages for a violation of those provisions to be commenced
no later than 2 years after the cause of action occurs or, if the cause of action arises out of a willful violation, no later than 3 years after the cause of action occurs.</html:p>
<html:p>This bill would prohibit an employer from paying employees at wage rates less than the rates paid to employees of another sex instead of the opposite sex, and would require a civil action to recover wages to be commenced no later than 3 years after the last date the cause of action occurs. The bill would provide that an employee is entitled to obtain relief for the entire period of time in which a violation of its provisions exists, but not to exceed 6 years.</html:p>
<html:p>This bill would specify that a cause of action occurs when
an alleged unlawful
compensation decision or practice is adopted, when an individual becomes subject to the decision or practice, or when an individual is affected by the application of the decision or practice. The bill would provide that its provisions do not prohibit the application of prescribed legal doctrine. The bill would define “wages,” “wage rates,” and “sex” for purposes of those provisions, and would specify that its provisions shall not be construed to define these terms for other purposes.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_FE4374F9-B0AC-474C-AAF1-9B3A02A55ECB">
<ns0:Num>SECTION 1.</ns0:Num>
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Section 432.3 of the
<ns0:DocName>Labor Code</ns0:DocName>
is amended to read:
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<ns0:Num>432.3.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
An employer shall not rely on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant for employment.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
An employer, upon request,
shall provide an employee the pay scale for the position in which the employee is currently employed.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
An employer with 15 or more employees shall include the pay scale for a position in any job posting.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
An employer shall maintain records of a job title and wage rate history for each employee for the duration of the employment plus three years after the end of the employment in order for the Labor Commissioner to determine if there is still a pattern of wage discrepancy. These records shall be open to inspection by the Labor Commissioner.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
An employer with 15 or more employees that engages a third party to announce, post, publish, or otherwise make known a job posting shall provide the pay scale to the
third party. The third party shall include the pay scale in the job posting.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A person who claims to be aggrieved by a violation of this section may file a written complaint with the Labor Commissioner within one year after the date the person learned of the violation. The complaint shall state the name and address of the employer and shall provide a detailed account of the alleged violation, as may be required by the Labor Commissioner.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A person who claims to be aggrieved by a violation of this section may also bring a civil action for injunctive relief and any other relief that the court deems appropriate.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The Labor Commissioner shall promptly investigate complaints alleging violation
of this section.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Upon finding that an employer has violated this section, the Labor Commissioner may order the employer to pay a civil penalty of no less than one hundred dollars ($100) and no more than ten thousand dollars ($10,000) per violation. The Labor Commissioner shall determine the amount of the penalty based on the totality of the circumstances, including, but not limited to, whether the employer has previously violated this section. For a first violation of subdivision (c), no penalty shall be assessed upon demonstration by the employer that all job postings for open positions have been updated to include the pay scale as required by this section.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
If an employer fails to keep records in violation of this section, there shall be a rebuttable presumption in favor of the
employee’s claim.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
Section 433 does not apply to this section.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
This section does not apply to salary history information disclosable to the public pursuant to federal or state law, including the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or the federal Freedom of Information Act (Section 552 of Title 5 of the United States Code).
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
This section applies to all employers, including state and local government employers and the Legislature.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
Nothing in this section shall prohibit an applicant from voluntarily and without prompting disclosing salary history information to a
prospective employer.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
If an applicant voluntarily and without prompting discloses salary history information to a prospective employer, nothing in this section shall prohibit that employer from considering or relying on that voluntarily disclosed salary history information in determining the salary for that applicant.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
Nothing in this section shall prohibit an employer from asking an applicant about the applicant’s salary expectation for the position being applied for.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
Consistent with Section 1197.5, nothing in this section shall be construed to allow prior salary to justify any disparity in compensation.
</html:p>
<html:p>
(l)
<html:span class="EnSpace"/>
All civil penalties collected pursuant
to this section shall be deposited into the Labor Enforcement and Compliance Fund for distribution to the Division of Labor Standards Enforcement. Upon appropriation by the Legislature, these funds may be expended by the division to cover reasonable ongoing costs of administering and enforcing this section.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
For purposes of this section, all of the following shall apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Pay scale” means a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Applicant” or “applicant for employment” means an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.
</html:p>
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 1197.5 of the
<ns0:DocName>Labor Code</ns0:DocName>
is amended to read:
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<ns0:Num>1197.5.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
An employer shall not pay any of its employees at wage rates less than the rates paid to employees of another sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The wage differential is based upon one or more of the following factors:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A seniority system.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A merit system.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
A system that measures earnings by quantity or quality of production.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, “business necessity” means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Each factor relied upon is applied reasonably.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The one or more factors relied upon account for the entire wage differential.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Prior salary shall not justify any disparity in compensation. Nothing in this section shall be interpreted to mean that an employer may not make a compensation decision based on a current employee’s existing salary, so long as any wage differential resulting from that compensation decision is justified by one or more of the factors in this subdivision.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
An employer shall not pay any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except
where the employer demonstrates:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The wage differential is based upon one or more of the following factors:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A seniority system.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A merit system.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
A system that measures earnings by quantity or quality of production.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A bona fide factor other than race or ethnicity, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a race- or ethnicity-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity.
For purposes of this subparagraph, “business necessity” means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Each factor relied upon is applied reasonably.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The one or more factors relied upon account for the entire wage differential.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Prior salary shall not justify any disparity in compensation. Nothing in this section shall be interpreted to mean that an employer may not make a compensation decision based on a current employee’s
existing salary, so long as any wage differential resulting from that compensation decision is justified by one or more of the factors listed in this subdivision.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Any employer who violates subdivision (a) or (b) is liable to the employee affected in the amount of the wages, and interest thereon, of which the employee is deprived by reason of the violation, and an additional equal amount as liquidated damages.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The Division of Labor Standards Enforcement shall administer and enforce this section. If the division finds that an employer has violated this section, it may supervise the payment of wages and interest found to be due and unpaid to employees under subdivision (a) or (b). Acceptance of payment in full made by an employer and approved by the division shall constitute a waiver
on the part of the employee of the employee’s cause of action under subdivision (h).
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
Every employer shall maintain records of the wages and wage rates, job classifications, and other terms and conditions of employment of the persons employed by the employer. All of the records shall be kept on file for a period of three years.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
Any employee may file a complaint with the division that the wages paid are less than the wages to which the employee is entitled under subdivision (a) or (b) or that the employer is in violation of subdivision (k). The complaint shall be investigated as provided in subdivision (b) of Section 98.7. The division shall keep confidential the name of any employee who submits to the division a complaint regarding an alleged violation of subdivision (a),
(b), or (k) until the division establishes the validity of the complaint, unless the division must abridge confidentiality to investigate the complaint. The name of the complaining employee shall remain confidential if the complaint is withdrawn before the confidentiality is abridged by the division. The division shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to these employees.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
The department or division may commence and prosecute, unless otherwise requested by the employee or affected group of employees, a civil action on behalf of the employee and on behalf of a similarly affected group of employees to recover unpaid wages and liquidated damages under subdivision (a) or (b), and in addition shall be entitled to recover costs of suit. The consent of any employee to the bringing of any
action shall constitute a waiver on the part of the employee of the employee’s cause of action under subdivision (h) unless the action is dismissed without prejudice by the department or the division, except that the employee may intervene in the suit or may initiate independent action if the suit has not been determined within 180 days from the date of the filing of the complaint.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
An employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of the wages, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorney’s fees, notwithstanding any agreement to work for a lesser wage.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A civil action to
recover wages under subdivision (a) or (b) may be commenced no later than three years after the last date the cause of action occurs.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
An employee is entitled to obtain relief for the entire period of time in which a violation of subdivision (a) or (b) exists, but not to exceed six years.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
For purposes of this subdivision, a cause of action occurs when any of the following occur:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
An
alleged unlawful compensation decision or other practice is adopted.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
An individual becomes subject to an alleged unlawful compensation decision or other practice.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
When an individual is affected by application of an alleged unlawful compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from the
decision or other practice.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Nothing in this subdivision shall prohibit the application of the doctrine of “continuing violation” or the “discovery rule” to any appropriate claim.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
If an employee recovers amounts due to the employee under subdivision (c), and also files a complaint or brings an action under subdivision (d) of Section 206 of Title 29 of the United States Code which results in an additional recovery under federal law for the same violation, the employee shall return to the employer the amounts recovered under subdivision (c), or the amounts recovered under federal law, whichever is less.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
An employer shall not discharge, or in any manner discriminate or retaliate against,
any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this section. If an employer engages in any action prohibited by this section within 90 days of the protected activity specified in this section, there shall be a rebuttable presumption in favor of the employee’s claim. An employer shall not prohibit an employee from disclosing the employee’s own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise their rights under this section. Nothing in this section creates an obligation to disclose wages.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Any employee who has been discharged, discriminated or retaliated against, in the terms and conditions of their employment because the employee engaged in any conduct delineated in this section may
recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
A civil action brought under this subdivision may be commenced no later than one year after the cause of action occurs.
</html:p>
<html:p>
(l)
<html:span class="EnSpace"/>
As used in this section:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Employer” includes public and private employers. Section 1199.5 does not apply to a public employer.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Sex” has the same meaning as defined in Section 12926 of the Government Code.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Wages” and “wage rates” include all forms of pay, including,
but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.
Nothing in this paragraph shall be construed to define “wages” or “wage rates” for purposes of any other section of this code.
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