Today's Law As Amended

PDF |Add To My Favorites | print page

AB-2571 Public employee retirement systems: investments: race and gender pay equity.(2017-2018)



SECTION 1.
 The Legislature finds and declares all of the following:
(a) More than 50 years after passage of the Equal Pay Act of 1963 and the Civil Rights Act of 1964, pay inequities along race and gender lines and sexual harassment remain pervasive. These problems are particularly acute and well-documented in the hospitality sector, a key and growing part of the California and United States economy.
(b) The purpose of this act is to ensure that, when it is consistent with and not in violation of their fiduciary responsibilities, California public retirement systems require that alternative investment vehicles in which they invest report specified information concerning race and gender pay equity and sexual harassment at the investment vehicles’ subsidiary entities in the hospitality sector.
(c) The information required to meet the reporting obligations in this act are readily available, consistent with existing federal reporting requirements, and do not impose an unreasonable burden on those required to prepare reports.

SEC. 2.

 Section 7513.76 is added to the Government Code, to read:

7513.76.
 (a) Nothing in this section shall require a public investment fund board to take any action that the board determines to be inconsistent with its fiduciary responsibilities, as described in Section 17 of Article XVI of the California Constitution.
(b) Every public investment fund shall require each alternative investment vehicle in which it invests to report at least annually information concerning any subsidiary entity of the alternative investment vehicle that is a hospitality employer, and any hospitality employer with which any subsidiary entity contracts to operate a facility owned by the subsidiary entity, as follows:
(1) With respect to race and gender pay equity:
(A) The annual mean compensation of employees, by gender.
(B) The annual mean compensation of employees, by ethnic or racial group.
(C) The number of employees employed in each job category, by gender, for each ethnic or racial group.
(D) The average annual compensation of employees in each job category, by gender, for each ethnic or racial group.
(2) With respect to sexual harassment:
(A) The existence, case identifying information including case number, and current status of any complaint alleging sexual harassment filed within the past five years by a current or former employee against the hospitality employer in a state or federal court of law or with an administrative agency.
(B) The existence and financial terms of any settlement entered into by the hospitality employer within the past five years involving the payment of monetary compensation to a current or former employee in exchange for a release of liability concerning an allegation of sexual harassment.
(3) The name and location of each hospitality employer for which information is reported pursuant to this subdivision.
(c) For the purposes of the reporting requirements described in subdivision (b):
(1) With respect to paragraph (1) of subdivision (b):
(A) An alternative investment vehicle shall be required to report data only with respect to hospitality employers that employ or exercise control over wages, hours, or working conditions of 100 or more employees.
(B) Alternative investment vehicles shall use the job categories and ethnic or racial groups included in the EEO-1 form used by the United States Equal Employment Opportunity Commission and the Office of Federal Contract Compliance. If the EEO-1 form is no longer in use or no longer includes job categories or ethnic or racial groups, the Department of Fair Employment and Housing shall issue regulations determining the job categories and ethnic or racial groups to be used for reporting, which, to the extent possible, shall match those of any similar federal reporting requirements applicable to firms covered by this section.
(C) An alternative investment vehicle shall not report compensation data if that reporting would reflect the compensation of three or fewer employees.
(2) With respect to paragraph (2) of subdivision (b), an alternative investment vehicle shall not report the name or any other identifying information concerning the person alleging sexual harassment unless a complaint was filed in a court of law or with an administrative agency.
(3) The Department of Fair Employment and Housing may issue regulations consistent with and necessary for the implementation of the reporting requirements of this section.
(d) Every public investment fund shall disclose the race and gender pay equity and sexual harassment information provided to it pursuant to subdivision (b) at least once annually in a report presented at a meeting open to the public and shall provide that report upon request to any member of the Legislature.
(e) This section applies to all new contracts the public investment fund enters into on or after January 1, 2019, and to existing contracts pursuant to which the public investment fund makes a new capital commitment on or after January 1, 2019.
(f) For the purposes of this section:
(1) “Alternative investment vehicle” means a limited partnership, limited liability company, or similar legal structure through which a public investment fund invests in a private equity fund, venture fund, hedge fund, absolute return fund, real estate fund, joint venture, coinvestment vehicle, comingled investment, direct investment, or any other investment that is not a publicly traded security or debt fund.
(2) “Compensation” means gross income as reported on a W-2 form, including wages, salaries, fees, commissions, tips, taxable fringe benefits, and elective deferrals, provided, however, that the Department of Fair Employment and Housing shall have authority to issue regulations providing an alternative definition of “compensation” to align to the extent possible with any rule adopted by the United States Equal Employment Opportunity Commission requiring reporting of employee compensation data applicable to employers covered by this section.
(3) “Employee” means a person employed by a hospitality employer or employed by an individual or entity that supplies workers to perform labor within the hospitality employer’s usual course of business.
(4) “Gender” refers to a person’s self-identified gender identity.
(5) “Hospitality employer” means any individual or entity in the United States that acts as an employer in the hospitality sector, including operators of hotels, motels, and resorts as well as operators of restaurants and bars located on the premises of hotels, motels, and resorts and does not mean an investment firm.
(6) “Public investment fund” means any fund of any public pension or retirement system, including that of the University of California to the extent consistent with Section 9 of Article IX of the California Constitution.
(7) “Sexual harassment” means sexual harassment as defined under applicable state or federal law.
(8) “Subsidiary entity” means any business organization, including, but not limited to, a corporation, partnership, or limited liability company, over which an alternative investment vehicle exercises, or has the right to exercise, control through ownership or control of shares of the business organization possessing more than 50 percent of voting power, whether directly or indirectly through one or more other subsidiary entities.
(g) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 3.

 Section 16642 of the Government Code is amended to read:

16642.
 (a)  Present, future, and former board members of the Public Employees’ Retirement System or the State Teachers’ Retirement System, jointly and individually, state officers and employees, research firms described in subdivision (d) of Section 7513.6, and investment managers under contract with the Public Employees’ Retirement System or the State Teachers’ Retirement System shall be indemnified from the General Fund and held harmless by the State of California from all claims, demands, suits, actions, damages, judgments, costs, charges charges,  and expenses, including court costs and attorney’s fees, and against all liability, losses, and damages of any nature whatsoever that these present, future, or former board members, officers, employees, research firms as described in subdivision (d) of Section 7513.6, or contract investment managers shall or may at any time sustain by reason of any decision to restrict, reduce, or eliminate investments pursuant to Sections 7513.6, 7513.7, and 7513.75.
(b) Present, future, and former board members of any public pension or retirement system, including, but not limited to, that of the University of California, jointly and individually, state officers and employees, and investment managers under contract with any public pension or retirement system shall be indemnified from the General Fund and held harmless by the State of California from all claims, demands, suits, actions, damages, judgments, costs, charges, and expenses, including court costs and attorney’s fees, and against all liability, losses, and damages of any nature whatsoever that these present, future, or former board members, officers, employees, or contract investment managers shall or may at any time sustain by reason of any decision to restrict, reduce, or eliminate investments pursuant to Section 7513.76.
SEC. 4.
 The Legislature finds and declares that Section 2 of this act, which adds Section 7513.76 to the Government Code, furthers, within the meaning of paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the purposes of that constitutional section as it relates to the right of public access to the meetings of local public bodies or the writings of local public officials and local agencies. Pursuant to paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the Legislature makes the following findings:
The information in the disclosures required under subdivisions (b) to (e), inclusive, of Section 7513.76 of the Government Code is necessary to ensure public confidence in the integrity of investments made by public investment fund boards in alternative investment vehicles.
SEC. 5.
 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 6.
 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district under this act would result from a legislative mandate that is within the scope of paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution.