A new California bill that would require businesses to report wage and hour metrics and employee benefits would also provide eligible companies access to tax benefits, contracts, and other incentives from the state.
The measure, AB 1192, has been included in this year’s list of Job Killers, released annually by the California Chamber of Commerce to identify pending legislation that will negatively impact the state’s business climate if passed.
“Job Killers are bills that discourage investment and hiring in California,” Denise Davis, CalChamber vice president, media relations and external affairs, told the Northern California Record by email. “Job Killers are particularly troubling this year as businesses struggle to recover from the effects of COVID-19 mandated shut downs. We need to be doing everything we can to help businesses get back on their feet rather than creating more costs and hurdles for them to overcome."
According to Bureau of Labor Statistics data included in a new University of New Hampshire Carsey School of Public Policy study, California lost more than 1.5 million jobs between February 2020 and last month.
AB 1192 is the first bill of its kind at the state level, and aligns with goals outlined by the Future of Work Commission, according to the bill’s sponsor, Assemblymember Ash Kalra, D-San Jose.
Kalra is among 21 appointees to the commission, which was created by Gov. Gavin Newsom in August 2019, and is co-chaired by Mary Kay Henry, president of the Service Employees International Union (SEIU).
Kalra told the Record by email that AB 1192 is different from SB 973, which became law in September and requires submitting annual wage data reports to the California Department of Fair Employment and Housing (DFEH).
“AB 1192 differs from SB 973 in that it is meant to provide a full picture of job quality at a given company,” Kalra said. “Thus, it covers data on wages, hours and scheduling, advancement, benefits, use of contractors, workplace safety and turnover.”
There is not a publication provision in SB 973.
Under AB 1192, companies would be required to provide information in more than 20 different categories to the Labor and Workforce Development Agency (LWDA), which would publish the data online.
Employers deemed qualified would be rewarded.
“It is the intent of the Legislature to establish a certification program to provide incentives, including as procurement contracts, tax benefits, and workforce development funding, as identified by the agency, to companies that qualify as high-road employers under the disclosure of worker-related statistics as classified by industry,” the bill text states.
An April 14 opposition letter to the Assembly Committee on Labor and Employment, which Kalra chairs, states, “AB 1192 forces employers to publicly disclose information regarding labor and employment issues for employees across the country that will subject employers to unfair and unwarranted shaming, as well as subject employers to frivolous litigation and the loss of state benefits.”
The Equal Employment Opportunity Commission (EEOC) also collects pay and diversity data from private businesses with more than 100 employees but under the Civil Rights Act of 1964 cannot make it public.
The opposition letter, authored by CalChamber Policy Advocate Ashley Hoffman, and signed by a coalition of three dozen organizations, also states, “AB 1192 Forces Employers to Publicly Report Information that Could Be Misused by Its Competitors”.
“I think quite the opposite,” Kalra said. “AB 1192 would create a ‘race to the top,’ with certified high-road employers eligible for various state benefits. This has the potential to attract to California those businesses that are creating quality jobs, as they stand to be rewarded for their exemplary practices."
Kalra said he disagreed that public posting of the information would put California employers at a disadvantage.
“As for the information that would be disclosed under AB 1192, I don’t think it’s a valid concern that competitors would be able to use the kind of information being made public to their advantage,” Kalra said. “In the area of wages, for example, AB 1192 would not require companies to report pay information in any kind of great detail that could give a competitor any real insight or edge.”
Crowdsourcing and job-posting sites provide far more company-level information on compensation than what would be required under AB 1192, Kalra said.
“What’s more, large companies routinely use these and other sources to benchmark wages and salaries in every market in which they operate,” Kalra said. “They already know what their competitors generally pay and how they stack up.”
The law would apply to private companies with 1,000 or more employees but not public agencies or nonprofit corporations.
The opposition letter notes one of the metrics concerns the use of independent contractors, the classification of which California regulates with the controversial AB 5 mandate, reform of which would hasten the state’s economic recovery, a recent CalMatters piece observed.
AB 1192, which is currently before the Assembly Committee on Labor and Employment, is scheduled for a hearing on Thursday.