A salary transparency bill passed this month by California lawmakers is “key to achieving pay equity,” according to state Sen. Monique Limón (D) who introduced the legislation in February.
Under the bill, which had not been signed into law by Gov. Gavin Newsom (D) as of Monday afternoon, all employers in the state with at least 15 workers would be required to include a job’s hourly rate or salary range on job listings. The legislation also would require an employer, on request, to provide to a worker with the pay scale for the position in which the employee currently works.
“Not only does the bill require employers to report wages for employees across race, gender and position in the company, it also proposes to publish each employer’s information on the internet,” Anthony Zaller, an attorney with Zaller Law Group in El Segundo, CA, told the Society for Human Resource Management.
The legislation would double down on a 2019 law that requires employers with more than 100 employees to submit pay data reports to the Department of Fair Employment and Housing, according to Limón.
“However, the bill did not require the information to be publicly available and did not include a growing workforce: temporary, contract, and contingent workers hired through third-party staffing agencies,” the state senator said. “SB 1162 closes this gap by requiring pay data to be publicly available and to include all workers.”
Colorado, Washington, New York City and other states or municipalities already require employers to disclose pay scale in job postings, but “through the mean and median pay reporting requirements, California would be the first jurisdiction to require employers to look at the distribution of employees throughout an organization by demographics,” according to Sarah J. Platt, a shareholder at labor and employment law firm Ogletree Deakins.
“With these changes, California law would address pay equity from all fronts, including prohibiting discrimination in pay for substantially equal work, prohibiting consideration of salary history in pay decisions, equipping applicants with equal information from which to negotiate starting pay, looking at metrics that could identify barriers to advancement to higher paying roles, and requiring reporting of compensation to the state,” Platt added.
