A new California bill signed into law on Tuesday will now require employers with more than 15 employees to list pay and salary ranges on all job postings.
Signed into law by Governor Gavin Newsom, Senate Bill 1162 was first introduced by Senator Monique Limón in February 2022.
The law will also require employers to provide a pay scale upon request. Employers who fail to comply could be fined under the new legislation.
The new law will come into force on January 1, 2023.
“Pay transparency is essential to achieving pay equity. SB 1162 will help identify pay disparities based on gender and race by requiring pay transparency at every stage of the hiring process, from hiring to promotion and continued employment,” Limón said. “We need to increase pay transparency to close the gender and race wage gap that prevents women, especially women of color, from accessing economic security.”
A similar bill was passed in 2019, SB 973, but that bill only required employers with more than 100 employees to submit compensation reports to the Department of Fair Employment and Housing. Wage and salary information was not required to be publicly available.
The new law will now bring California into line with other states and cities that have enacted similar pay transparency laws, including Washington, Maryland, New York, Ohio (Toledo and Cincinnati only), Colorado, Nevada, Connecticut and Rhode Island.
Supporters of the bill say the lack of pay transparency disproportionately affects people of color and female employees.
“During our research for the Contract Worker Disparity Project, we found that contract workers (who are disproportionately Black, Indigenous, Latino, Asian, female, and non-binary) are more likely to be paid less and to have less access to benefits and protections, despite doing similar work to direct employees,” said Catherine Bracy, CEO and co-founder of TechEquity Collaborative.
According to the US Department of Labor, women in the United States currently earn 82 cents for every dollar earned by a man.
“In 2020, women’s annual earnings were 82.3% of men’s, and the gap is even greater for many women of color,” the study said. Overall, women were earning less than men in almost all occupations, with the pandemic blocking any gains made to narrow the pay gap even further.
“Transparency is essential if we are to close the gender and racial wage gaps that still persist in nearly every industry and profession in this country. Providing pay scales on job postings gives women and other workers the information they need to make the best decisions for their families and negotiate the income they deserve,” said Jessica Ramey Stender, Director of Policy and Associate Legal Director at Equal Rights Advocates. “California has led the nation in protecting equal pay and this bill is the logical next step to continue that progress and continue to set a path for other states to follow.”
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