Amended  IN  Assembly  August 08, 2018
Amended  IN  Senate  May 25, 2018
Amended  IN  Senate  April 24, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 1284

Introduced by Senator Jackson

February 16, 2018

An act to add Chapter 7.2 (commencing with Section 160) to Division 1 of the Labor Code, 10 (commencing with Section 12999) to Part 2.8 of Division 3 of Title 2 of the Government Code, relating to employment.


LEGISLATIVE COUNSEL'S DIGEST


SB 1284, as amended, Jackson. Employers: annual report: pay data.
Existing law establishes the Department of Industrial Relations in the Labor and Workforce Development Agency to foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment. Existing law establishes within the department the Division of Labor Standards Enforcement, which is vested with the general duty of enforcing various labor laws. Existing law creates the Labor Enforcement and Compliance Fund, moneys in which, upon appropriation by the Legislature, are available to support the Division of Labor Standards Enforcement, including, among other things, enforcement of laws prohibiting wage differentials.
Existing law establishes the Department of Fair Employment and Housing within the Business and Consumer Services Agency to enforce civil rights laws with respect to housing and employment and to protect and safeguard the right of all persons to obtain and hold employment without discrimination based on specified characteristics or status.
Existing federal law requires specified companies to file with the federal Equal Employment Opportunity Commission an annual Employer Information Report (EEO-1) that contains specified data regarding demographics of the employer’s workforce.
This bill would require, on or before September 30, 2019, and on or before September 30 each year thereafter, a private employer that has 100 or more employees and who is required to file an annual Employer Information Report under federal law, to submit a pay data report to the Department of Industrial Relations Fair Employment and Housing that contains specified wage information. This bill would require the department to make the reports available to the Department of Fair Employment and Housing upon request. This The bill would impose specified civil penalties on any employer who does not comply with the reporting requirement, and would require any penalties collected to be deposited into the Labor Enforcement and Compliance Fund, to be allocated upon appropriation by the Legislature to the Division of Labor Standards Enforcement to enforce wage differential laws. This The bill would authorize the Labor Commissioner to issue a citation to an employer for a violation of these provisions. This the Department of Fair Employment and Housing, if the department does not receive the required report from an employer, to seek an order requiring the employer to comply, as specified. The bill would require the department to maintain the pay data reports for a minimum of 10 years and make it unlawful for any officer or employee of the department or the Department of Fair Employment and Housing to make public in any manner whatever any individually identifiable information obtained from this report, as specified.
The bill would make legislative findings in support of these provisions.
The California Public Records Act requires a public agency to make public records available for inspection, unless an exemption from disclosure applies.
This bill would provide that any information disclosed to the department pursuant to this bill be considered confidential information and not subject to disclosure pursuant to the California Public Records Act, except as specified.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Despite significant progress made in California in recent years to strengthen California’s equal pay laws, the gender pay gap persists, resulting in billions of dollars in lost wages for women each year in California.
(b) Pay discrimination is not just a women’s issue, but also harms families and the state’s economy. In California, in 2016, women working full time, year round made a median 88 cents to every dollar earned by men, and for women of color, that gap is far worse.
(c) Although there are legitimate and lawful reasons for paying some employees more than others, pay discrimination continues to exist, is often “hidden from sight,” and can be the result of unconscious biases or historic inequities.
(d) Recognizing that pay discrimination is difficult to detect and address, the Obama Administration announced a proposed revision to the Employer Information Report (EEO-1) to include the reporting of pay data by gender, race and ethnicity beginning in 2018. However, in August 2017, the Trump Administration put a halt to the implementation of this new rule.
(e) It is the intent of the Legislature, in enacting this bill, to ensure that this pay data will continue to be compiled and aggregated in California.
(f) Further, it is the intent of the Legislature in enacting this bill for data collection purposes to allow for the designated state agencies to collect wage data to more efficiently identify wage patterns and allow for targeted enforcement of equal pay or discrimination laws, when appropriate. Therefore, it is the intent of the Legislature that this pay data will be kept confidential and not available for disclosure, except as necessary for administrative enforcement or through the normal rules of discovery in a civil action.
SECTION 1.Chapter 7.2 (commencing with Section 160) is added to Division 1 of the Labor Code, to read:

SEC. 2.

 Chapter 10 (commencing with Section 12999) is added to Part 2.8 of Division 3 of Title 2 of the Government Code, to read:
CHAPTER  10. Annual Pay Data Report

160.12999.
 (a) On or before September 30, 2019, and on or before September 30 each year thereafter, a private employer that has 100 or more employees and who is required to file an annual Employer Information Report (EEO-1) pursuant to federal law shall submit a pay data report to the department. The department shall make the reports available to the Department of Fair Employment and Housing upon request.
(b) The pay data report shall include the following information:
(1) The number of employees by race, ethnicity, and sex in each of the following job categories:
(A) Executive or senior level officials and managers.
(B) First or mid level mid-level officials and managers.
(C) Professionals.
(D) Technicians.
(E) Sales workers.
(F) Administrative support workers.
(G) Craft workers.
(H) Operatives.
(I) Laborers and helpers.
(J) Service workers.
(2) The number of employees by race, ethnicity, and sex, whose annual earnings fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupation Occupational Employment Statistics survey. For purposes of establishing these numbers, an employer shall use each employee’s total earnings as shown on the Internal Revenue Service Form W-2 for a 12-month period looking back from any pay period between July 1 and September 30 of each calendar year. Employers shall tabulate and report the number of employees whose W-2 earnings for the prior 12 months fell within each pay band.
(c) For part-time and partial-year employment, the employer shall include the total number of hours worked by each employee counted in each pay band over the last 12 months.
(d) For employers with multiple establishments, the employer shall submit a report for each establishment and a consolidated report that includes all employees.
(e) The report shall include a section for employers to provide clarifying remarks regarding any of the information provided. An employer is not required to provide clarifying remarks.
(f) If an employer is required to file an Employer Information Report, otherwise known as the EEO-1 Report, with the United States Equal Employment Opportunity Commission or other federal agency that includes the same or substantially similar pay data information required under this section, the employer may satisfy compliance with this section by submitting the Employer Information Report to the department.

(g)(1)An employer who does not comply with this section is subject to a civil penalty of five hundred dollars ($500) for the initial violation and five thousand dollars ($5,000) for a subsequent violation.

(2)If, upon inspection or investigation, the Labor Commissioner determines that a violation of this section has occurred, the commissioner may issue a citation. The procedures for issuing, contesting, and enforcing citations and judgments for civil penalties issued by the commissioner for violations of this section shall be the same as set forth in Section 1197.1.

(3)Any civil penalties collected pursuant to this section shall be deposited into the Labor Enforcement and Compliance Fund, created pursuant to subdivision (e) of Section 62.5, and upon appropriation by the Legislature, shall be allocated to the Division of Labor Standards Enforcement to enforce Section 1197.5.

(g) If the department does not receive the required report from an employer, the department may seek an order requiring the employer to comply with these requirements and shall be entitled to recover the costs associated with seeking the order for compliance.
(h) For purposes of this section, both of the following definitions shall apply:
(1) “Employee” means an individual on an employer’s payroll, including a part-time individual, for whom the employer is required to withhold federal social security taxes from that individual’s wages.
(2) “Establishment” means an economic unit producing goods or services.
(i) It shall be unlawful for any officer or employee of the department or the Department of Fair Employment and Housing to make public in any manner whatever any individually identifiable information obtained pursuant to their authority under this section prior to the institution of any proceeding investigation or enforcement proceeding by the department under Section 1197.5 of this code the Labor Code or Section 12940 of the Government Code this code involving such information. information, and only to the extent necessary for purposes of the enforcement proceeding. For the purposes of this subdivision, “individually identifiable information” includes data that is associated with a specific person or business.
(j) Any information disclosed to the department pursuant to this section shall be considered confidential information and not subject to disclosure pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). 1).
(k) Notwithstanding subdivision (i), the department or the Department of Fair Employment and Housing may develop and publicize aggregate reports based on the data obtained pursuant to their authority under this section, provided that the aggregate reports are reasonably calculated to prevent the association of any data with any individual business or person.
(l) The department shall maintain pay data reports for not less than 10 years.

SEC. 2.SEC. 3.

 The Legislature finds and declares that Section 1 2 of this act, which adds Section 160 12999 to the Labor Government Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
To maintain the privacy of individuals who are the subject of sensitive information, that employers are required to report, regarding compensation and hours worked, sorted by gender, race, ethnicity, and job category in order to measure progress and further the state’s goal of achieving equal pay for women and people of color.