​Job Killer Bill Interfering with Hiring Decisions Held on Suspense File

​(May 10, 2012) A California Chamber of Commerce-opposed bill that subjects employers to charges of discrimination for legitimately inquiring into an applicant’s employment history was held on the Assembly Appropriations Committee suspense file yesterday, pending review of the bill’s fiscal impact.

AB 1450 (Allen; D-Santa Rosa) is a “job killer” bill that  essentially prohibits employers from legitimately inquiring into an applicant’s employment history due to fear that any such inquiry will ultimately lead to penalties and costs on the basis that the applicant was discriminated against because of his/her status as unemployed.

The bill also unfairly targets state contractors by imposing a three-year debarment from state contracts if found to have violated the provisions of the bill, thus essentially providing a hiring preference for the unemployed with state contractors.

Current ‘Employment Status’

AB 1450 prohibits employers from considering an applicant’s current “employment status” when hiring for an available position, unless such status satisfies a “bona fide occupational” requirement. Although the bill states it does not prohibit an employer from reviewing the applicant’s employment status or the reasons for any separation from employment, AB 1450 will essentially do just that.

In order to avoid accidentally exposing an applicant’s current status as “unemployed” during the application process, employers ultimately will be barred from asking for:

  1. information regarding the applicant’s most recent employer;
  2. the dates of employment with the most recent employer; or 
  3. reasons for the separation from employment with the most recent employer.

Any of these legitimate inquiries could reveal that the applicant is currently unemployed, thereby subjecting the prospective employer to fees, penalties and an administrative claim through the Division of Labor Standards Enforcement (DLSE), as well as potential litigation under the Labor Code Private Attorney General Act (PAGA), or Business and Professions Code Section 17200 for alleged unfair business practices.

Moreover, AB 1450 does not differentiate between applicants who are unemployed due to their inadequate or insufficient performance with their most recent employer, versus applicants who were unfortunately a part of a layoff.

An employer should be allowed to investigate the reasons a person is unemployed, including whether the applicant was recently terminated for serious misconduct, before offering that person a job and bringing him/her into the workplace.

AB 1450, however, would place employers in the impossible situation of either:

  1. investigating an applicant’s most recent employment, including the reasons for the separation of his/her employment with the employer, and potentially facing an administrative claim or litigation for the alleged violation of AB 1450 if the applicant is ultimately not hired; or 
  2. foregoing any investigation into the most recent employment of the applicant to prevent a claim that he/she was discriminated against on the basis of the applicant’s “unemployed status,” and risk a potential negligent hiring claim on the back end for hiring an at-risk employee that the employer knew or should have known was a potential danger.

Creates Hiring Preference

AB 1450 will also in essence create a hiring preference for unemployed individuals, especially for state contractors. Instead of basing an employment decision on the actual qualifications of the applicant, employers will likely lean toward an unemployed applicant solely to eliminate any claim of alleged discrimination. This will certainly be the case for state contractors, as AB 1450 unfairly targets these employers by threatening them with three years of debarment from eligibility for an award of a state contract if they are found to have discriminated against an applicant based upon the applicant’s unemployed status.

No Impact on Unemployment

Finally, this bill will not affect the unemployment rate. If there is an available position, the employer will ultimately hire someone. The only thing AB 1450 does is inappropriately instruct private employers on who they can and cannot hire. The ability to determine which candidate is the most qualified for an available position is an independent decision that should be left to the employer, not state government.

Action Needed

AB 1450 will be considered by Assembly Appropriations at the committee’s next hearing and may be voted off the suspense file and sent to the full Assembly for a vote.

Contact your Assembly representatives and members of Assembly Appropriations and urge them to oppose AB 1450.

Staff Contact: Jennifer Barrera