AB 1192: What Employers Should Know About The Bill.
Analysts predict California's new bill, AB 1192, will create more frivolous litigation and settlement demands for employers statewide. Indeed, even CalChamber, specialists in Labor Law compliance, labeled AB 1192 a "job killer." If passed, the bill will affect employers throughout California as the bill implements additional burdens on employers by establishing mandatory reporting for various workforce statistics including but not limited to employee race, ethnicity, gender, wage data, hour data, and employee benefits relating to the employer's entire workforce throughout the United States.
As proposed, this bill establishes a new program within the LWDA which requires submission of labor statistics, the collection of worker related statistics annually, mandates assignment of employers to industry classifications in the Global Industry Classification Standard system, requires the Employment Development Department ("EDD") to provide the LWDA with employer information to monitor and encourage compliance with the program, and requires the LWDA to post annual reports on its website, beginning on June 30, 2023, which detail all worker-related statistics which were submitted by employers.
Analysts are concerned that the information provided by employers pursuant to the bill will be discoverable by plaintiff's attorneys who undertake fishing expeditions by sending requests to the LWDA. Plaintiff's attorneys would then leverage the widely available information to create boilerplate settlement demands. As a result, the bill may create additional exposure and litigation on the grounds of discrimination or unequal employment practices, even if the allegations are unsupported. Moreover, the bill requires employers to provide personnel data which employers are not legally permitted to require from their employees. By way of example, the bill mandates reporting of an employee's race and gender. However, California employers cannot require an employee to identify their race or gender as a condition of employment.
Notably, previous attempts to pass a similar bill, AB 1209, were unsuccessful when Governor Brown vetoed it based on a concern that the bill's "ambiguity could be exploited to encourage more litigation than pay equity." When a subsequent version of AB 1209 passed as SB 973, the legislature intentionally removed any publication provisions, stating that the Department of Fair Employment and Housing ("DFEH") could not publish data associated with specific companies, but permitted the DFEH to publish public data in the aggregate.
As currently drafted, the bill only applies to employers with over 1,000 employees. However, small employers should also keep a watchful eye on the bill and subsequent amendments as the threshold for the number of employees could still change prior to any enactment. If enacted, covered employers should consult legal counsel to ensure workplace compliance and minimize the potential risks which may arise from the additional reporting requirements.