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S.F. No. 1806 - Pay Equity Compliance as a Condition for Certain State Contracts, First Engrossment
 
Author: Senator Sandra L. Pappas
 
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
 
Date: March 12, 2014



 

Section 1 [Scope] and Section 2 [Certificates of Compliance] provide that access to data relating to pay equity compliance is as provided in new law later than this bill.

Section 3 [Certificate of Pay Equity Compliance], Subdivision 1 [Definitions] defines terms used in this section.  "Business" means a business having more than 40 full-time employees within the state on a single working day during the previous 12 months.  Defines certain other terms:  "balanced class," "comparable work value," "equitable compensation relationship," "female-dominated class," and male-dominated class."

Subd. 2 [Establishment] requires every business that contracts with the state for goods and services over $500,000 to establish equitable compensation relationships between female-dominated, male-dominated, and balanced classes to eliminate wage disparities.

 Subd. 3 [Required certificate of pay equity] precludes state departments and agencies from accepting bids or proposals for contracts for goods or services over $500,000 from businesses that have not done one of the following:

(1) obtained a certificate of pay equity compliance;

(2) applied for a certificate; or

(3) certified that it is exempt from the requirements.

This section precludes an agency from executing a contract for goods or services over $500,000 with a business, unless the business has a certificate of pay equity compliance or certificate that it is exempt from the requirement.

Subd. 4 [Job evaluation system] requires every business that contracts with the state for goods and services over $500,000 to use a job evaluation system to determine comparable work value for employees within the state.  The system must be kept up to date.

Effective Date.  This section applies to contracts executed on or after August 1, 2014.

Section 4 [Access to Certificate Data] makes data relating to a certificate application confidential data on individuals or protected nonpublic data.  Designates certain information as public.

Section 5 [Certificate of Pay Equity Compliance], Subdivision 1 [Definitions] defines terms for this section.

Subd. 2 [Compliance good faith effort]  requires the Department of Human Rights to approve a plan and issue a certificate of pay equity compliance to a business that demonstrates that it is in compliance with equitable compensation relationship standards or is making a good faith effort to achieve compliance with those standards.  A certificate is valid for four years.  

If a business is not in compliance, but is making a good faith effort to comply, the commissioner will grant the business a certificate of compliance. Until August 1, 2015, the commissioner will grant a temporary certificate to a business that demonstrates good faith if the commissioner has approved (1) a statement of the business’s intention to prepare a pay equity report by July 1, 2016; and (2) information on the business’s current status, including a statement on the existence of a job evaluation system, the total number of male and female employees of the business within the state, and the business’s interest in receiving training on how to establish equitable compensation relationships. On or after August 1, 2015, the commissioner will grant a certificate of compliance to a business that demonstrates good faith if the commissioner has approved a plan for achieving compliance and a proposed date for achieving compliance and for submitting a revised report to the commissioner.

Subd. 3 [Reasonable relationship defined] defines reasonable relationship.

Subd. 4 [Filing fee; account; appropriation] requires the commissioner to collect a fee of $150 for each certificate of compliance.  These fees are deposited in a special revenue account and are appropriated by a standing appropriation to the commissioner.

Subd. 5 [Revocation of certificate] permits the Commissioner of Human Affairs to suspend or revoke a certificate of compliance if a business is not effectively implementing, or making a good faith effort to implement, its approved plan to establish equitable compensation relationships.  This section also permits the commissioner to refuse to approve subsequent plans submitted by that business if a business does not effectively implement its approved plan or fails to make a good faith effort to do so.

Subd. 6 [Revocation of contract] permits a department or agency to terminate a contract if a certificate of compliance is suspended or revoked.  If a contract is awarded to a business that does not have a certificate of compliance, the Commissioner of Administration may void the contract.

 Subd. 7 [Technical assistance] requires the Commissioner of Human Affairs to provide technical assistance to a contractor after suspending its certificate of compliance.  The technical assistance may enable a contractor to be recertified within 90 days after suspending the certificate.

Subd. 8 [Access to data] defines the status of several types of data.  Data submitted to the Commissioner of Human Rights by a business to obtain a certificate of compliance is private data on individuals or nonpublic data with respect to persons other than employees of the Department of Human Rights.  The commissioner’s decision to grant, not grant, revoke, or suspend a certificate of compliance is public data.

Subd. 9 [Rules] makes certain existing rules applicable to implement this act.  The existing rules were promulgated to implement a pay equity process for political subdivisions.

 Section 6 [Report] requires the Commissioner of Human Rights, in cooperation with the Commissioner of Administration, to report to the Legislature by July 31, 2015, on implementation of this act.  The report must include findings and recommendations on any changes needed to ensure that state contractors achieve equitable compensation relationships.

SJJ/rdr

 

 

 
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