This article was originally written by The HR Specialist: California Employment Law for Discrimination and Harassment [http://www.businessmanagementdaily.com/category/human-resources/discrimination-and-harassment?affilateid=Tribune]
by Hera S. Arsen, Ph.D.
On Oct. 7, Gov. Jerry Brown signed Senate Bill 703 (SB 703), protecting transgender employees whose employers engage in business with state agencies.
Specifically, the bill expands on the state’s existing discrimination laws by prohibiting “a state agency from entering into contracts for the acquisition of goods or services of $100,000 or more with a contractor that discriminates between employees on the basis of gender identity in the provision of benefits.”
The new law will apply only to those portions of a contractor’s operations that occur within the state of California, on property outside California that is owned by the state or that the state has a right to occupy, and if the contractor’s presence at that location is connected to a contract with the state, elsewhere in the United States where work related to a California contract is being performed.
Insurance coverage
In addition, under the new law, an employee health plan is discriminatory if the plan is not consistent with California’s nondiscrimination laws governing health and insurance plans (under section 1365.5 of the Health and Safety Code and section 10140 of the Insurance Code). Those section prohibit sex discrimination in health insurance.
The new law also requires state agencies that enter into contracts subject to the new law to include a statement in the contract by which the contractor certifies that it is in compliance with the law.
Confidentiality required
The new law imposes a confidentiality requirement on contractors. Specifically, the law requires contractors to “treat as confidential, to the maximum extent allowed by law or by the requirement of the contractor’s insurance provider, any request by an employee or applicant for employment benefits or any documentation of eligibility for benefits submitted by an employee or applicant for employment.”
According to the new law, “[a] contractor shall not be deemed to” discriminate “in the provision of benefits” under the following circumstances:
* The contractor, in providing the benefits, pays the actual costs incurred in obtaining the benefit.
* The contractor is unable to provide a certain benefit, despite taking reasonable measures to do so.
If an agency takes “all reasonable measures to find a contractor that complies” with this law, the agency may waive the requirements of the new law under the following limited circumstances:
* There is only one contractor willing to enter into a given contract with the state agency.
* The contract is necessary to respond to an emergency, as defined by the statute.
* “The requirements of this section violate, or are inconsistent with, the terms or conditions of a grant, subvention, or agreement, if the agency has made a good-faith attempt to change the terms or conditions of any grant, subvention, or agreement to authorize application of this section.”
* The contractor provides water, power or natural gas products or services “as required for ensuring reliable services in accordance with good utility practice,” which cannot “practically be accomplished through the standard competitive bidding procedures and the contractor is not providing direct retail services to end users.”
The bill–authored by State Sen. Mark Leno (D-San Francisco) and co-sponsored by the National Center for Lesbian Rights, Equality California and Transgender Law Center–takes effect Jan. 1.
In a statement, Leno said, “California law already stipulates that employers cannot deny transgender people health care and other benefits, but a loophole in state law has allowed companies that contract with the state to refuse equal health coverage.” According to Leno, “This bill closes that loophole.”
California demonstrates, once again, that it is on the cutting edge of laws protecting employees disadvantaged by their minority status–and in leveling the playing field for all, regardless of sex, race, creed, color or gender.
Employers should expect more legislation like this in years to come.
Hera S. Arsen, Ph.D., is managing editor of firm publications and is based in the Torrance office of Ogletree Deakins.
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