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SB-1241 Discrimination in employment: employment tests and selection procedures.(2019-2020)

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Date Published: 02/20/2020 09:00 PM
SB1241:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 1241


Introduced by Senator Lena Gonzalez
(Principal coauthor: Assembly Member Jones-Sawyer)
(Coauthor: Senator Bradford)
(Coauthor: Assembly Member Gipson)

February 20, 2020


An act to add Sections 12954 and 12954.2 to the Government Code, relating to employment.


LEGISLATIVE COUNSEL'S DIGEST


SB 1241, as introduced, Lena Gonzalez. Discrimination in employment: employment tests and selection procedures.
Existing law, the California Fair Employment and Housing Act, protects and safeguards the right and opportunity of all persons to seek, obtain, and hold employment without discrimination, abridgment, or harassment on account of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status.
This bill would create a presumption that an employer’s decision relating to hiring or promotion based on a test or other selection procedure is not discriminatory, if the test or procedure meets specified criteria, including, among other things, that it is job related and meets a business necessity, as defined by the bill for purposes of these provisions and specified existing law, and that the test or procedure utilizes pretested assessment technology that, upon use, resulted in an increase in the hiring or promotion of a protected class compared to prior workforce composition. The bill would also require the employer to keep records of the testing or procedure and submit them for review by the Department of Fair Employment and Housing, upon request, in order to qualify for the presumption. The bill would define other terms for purposes of these provisions.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 12954 is added to the Government Code, to read:

12954.
 The Legislature finds and declares all of the following:
(a) State law protects and safeguards the right and opportunity of all persons to seek, obtain, and hold employment without discrimination on account of certain protected characteristics as established under Section 12940.
(b) State law permits an employer to utilize tests and other selection procedures for purposes of hiring or promotion provided the tests and selection procedures do not have an unlawful discriminatory impact.
(c) Under state law, a test or other selection procedure that has a disparate impact on employment opportunities of individuals of a protected class is unlawful unless the employer establishes that the test or selection procedure is job related and consistent with business necessity. In establishing a business necessity, an employer must, prior to implementation of the test or selection procedure, investigate alternatives and must opt for the alternative that poses the lowest risk of discriminatory impact.
(d) The use of technologies in hiring and promotion has the potential to reduce bias and discrimination in hiring and promotion, provided that the technologies meet certain standards of use. It is the intent of the Legislature, in enacting Section 12954.2, to promote the development of technologies that can demonstrate a reduction in bias and discrimination in hiring and promotion by establishing certain standards applicable to the use of such technologies.

SEC. 2.

 Section 12954.2 is added to the Government Code, to read:

12954.2.
 (a) For purposes of Section 12940, an employer's decision relating to hiring or promotion based on a test or other selection procedure shall be presumed not to discriminate on the basis of a finding of disparate impact on a specific protected class if, for such protected class, all of the following are satisfied:
(1) The test or selection procedure is job related and meets a business necessity, according to a validity study conducted by the employer that conforms to the requirements set forth in Section 1607.5 of Title 29 of the United States Code of Federal Regulations.
(2) The test or selection procedure is a pretested assessment technology that, upon use, resulted in an increase in the hiring or promotion of that protected class as compared to the preimplementation workforce composition of the protected class.
(3) The employer conducts an annual examination of the pretested assessment technology to determine and document whether the technology had a disparate impact for the protected class during the audited year.
(4) The annual examination demonstrates that the pretested assessment technology meets either of the following requirements:
(A) Resulted in an increase in the hiring or promotion of the protected class during the examined year as compared to the preimplementation workforce composition of the protected class.
(B) Resulted in no disparate impact on the protected class.
(5) If any version of the pretested assessment technology does not meet the requirements of paragraph (4), the employer ceases to use that version for the purpose for which it has failed to meet these requirements.
(b) An employer may not qualify for the presumption provided under subdivision (a) unless both of the following are met:
(1) The employer treats any records generated in the course of seeking to satisfy the requirements of subdivision (a) in accordance with Section 12946, including, but not limited to, both of the following:
(A) The results of any pretesting of an assessment technology.
(B) The results of any annual examination.
(2) Upon request by the department, the employer provides copies of the records required to be preserved under paragraph (1).
(c) The presumption created under subdivision (a) may be rebutted by clear and convincing evidence, presented by the department or a person of a protected class that experienced a disparate impact, showing that the employer seeking to enjoy the presumption had reason to believe that such disparate impact would occur before using the test or other selection procedure that caused such disparate impact.
(d) This section does not affect any other defense an employer may have to claims of employment discrimination under any other provision of law.
(e) For purposes of this section, the following definitions apply:
(1) “Applicant” shall have the same meaning as set forth in Section 11008 of Title 2 of the California Code of Regulations.
(2) “Business necessity” means, for the purposes of Section 12940 and this section, all of the following:
(A) An overriding legitimate business purpose exists such that the test or selection procedure is necessary to the safe and efficient operation of the business.
(B) The test or selection procedure effectively fulfills the business purpose it is supposed to serve.
(C) There is no alternative practice to the test or selection procedure that would accomplish the business purpose equally well with a lesser discriminatory impact.
(3) “Disparate impact” shall be indicated where the selection rate for any protected class existing in 2 percent or more of the total applicant population is less than four-fifths of the selection rate for the class with the highest selection rate and where such difference in selection rates between such classes is statistically significant.
(4) “Preimplementation workforce composition” means the demographic composition of a protected class as a percentage of the employer’s overall workforce that existed immediately prior to implementation of a preaudited assessment technology.
(5) “Pretested assessment technology” means a test or other selection procedure used by an employer for purposes of hiring or promotion that, prior to use by the employer, was examined and demonstrated no probability for disparate impact on persons of a protected class.
(f) The department shall have the power to adopt regulations to interpret, implement, and apply the provisions of this section.
(g) This section shall not apply to claims of discriminatory treatment or disparate impact of protected classes where the protected class was not included in the pretesting stage as described in paragraph (5) of subdivision (e).