Jackson Bill to Close Race and Gender Pay Gap Signed Into Law

September 30, 2020

SACRAMENTO – As women and people of color are being disproportionately impacted by the pandemic and its economic challenges, legislation by Senator Hannah-Beth Jackson (D-Santa Barbara) to address the race and gender-based pay gap was signed into law by Governor Gavin Newsom today.

Senate Bill 973 requires that California employers with 100 or more employees submit a pay data report annually to the Department of Fair Employment and Housing, outlining compensation and hours worked of its employees by gender, race, ethnicity and job category.

The bill is modeled after a federal Equal Employment Opportunity Commission effort to collect pay data by race and gender instituted under the Obama Administration that was later halted by the Trump Administration. Despite a federal court ruling requiring the EEOC to collect two more years of data, the EEOC issued public notice that it will not seek renewal of the pay data collection beyond what was required by the court. In addition, the Trump Administration, in a historically unprecedented move, is prohibiting the sharing of this data with state agencies, despite the fact that it has been shared and used as an enforcement tool in many states for decades.

“Despite all the progress our state has made on equal pay, the pay gap remains a serious problem that costs an estimated $79 billion in lost wages a year in California. The pay gap is especially concerning for women of color with African American women earning 61 cents and Latinas just 42 cents for every dollar earned by white, non-Hispanic men,” said Senator Jackson. “With the Governor’s approval of SB 973, California is taking another important step toward true pay equity.”

The bill would permit state agencies to identify patterns of wage disparities and better enforce wage discrimination laws, when appropriate. It would also encourage employers to analyze and self-correct their own pay practices in the process, while ensuring privacy by requiring that individually identifiable information be protected and not available to the general public.

When pay disparities go undetected, it becomes even more difficult to close the pay gap. In fact, many employers themselves are unaware of discrepancies in their own companies. Last year, the company Intel voluntarily released this data and revealed that 41 of 52 top executives making more than $208,000 a year were men and 37 were white. This revelation was eye opening and led to calls for change within the company itself.

Senator Jackson is a national leader in the fight for pay equity. She is the author of Senate Bill 358, the California Fair Pay Act, which was the strongest equal pay law for women in the country when it passed the Legislature in 2015.

Jackson represents the 19th Senate District, which includes all of Santa Barbara County and western Ventura County.