SENATOR LIMÓN INTRODUCES PAY TRANSPARENCY FOR PAY EQUITY ACT
(SACRAMENTO) – Senator Monique Limón (D-Santa Barbara) introduced SB 1162 to help close the wage gap by requiring the disclosure of salary ranges on all job postings, and to make employer internal promotional opportunities available to current employees. SB 1162 also requires companies to publically report pay data broken down by race, ethnicity, and sex for both direct employees and employees hired through a third-party staffing agency.
According to a recent analysis of pay data required under SB 973, California women in 2020 lost $46 billion due to the gender pay gap and people of color in the state lost $61 billion due to the race pay gap1.
“Pay transparency is key to achieving pay equity. SB 1162 will help identify the gender and race-based pay disparities by requiring pay transparency at every stage of the employment process, from hiring, to promotion, and ongoing employment,” said Senator Limón. “We must increase pay transparency in order to close the gender and racial wage gap, which prevents women, particularly women of color, from achieving economic security.”
In 2019, SB 973 became law to require employers with more than 100 employees to submit pay data reports to the Department of Fair Employment and Housing. 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. SB 1162 closes this gap by requiring pay data to be publicly available and to include all workers.
Increasing pay transparency is a critical component to closing the wage gap, including at the hiring stage. Research shows that when job applicants are clearly informed about the context for negotiations, including the salary range, women are more willing to negotiate, more successful in negotiating, and the gender wage gap narrows.2
“One of the biggest hurdles to combatting pay inequities is that they are often hidden from sight. By requiring greater transparency around employer pay data, this bill will help empower workers to seek fair pay,” said Mariko Yoshihara, Policy Director & Legislative Counsel at the California Employment Lawyers Association. “Additionally, by requiring employers to make their existing pay day reports publicly available, it will help reveal the structural inequities within companies and within different industries that have allowed the race and gender wage gap to persist.”
“During our research for the Contract Worker Disparity Project, we found that contract workers (who are disproportionately Black, Indigenous, Latinx, Asian, women, and nonbinary) are more likely to be paid less and have less access to benefits and protections, despite performing similar work to direct employees,” Catherine Bracy, CEO and Co-Founder of TechEquity Collaborative. “We need clear, tangible policy that will close the gap between contract and directly-employed workers and tackle the racial and gender wealth disparities inherent to this work. The Pay Transparency for Pay Equity Act will make pay equity a reality for contract workers in California, setting a standard for contracting practices across the country.”
“Transparency is key if we want to close the gender and race wage gaps, which still persist in nearly every industry and occupation in this country. Providing salary ranges on job postings empowers women and other workers with information they need to make the best decisions for their families and negotiate for the income they deserve,” said Jessica Ramey Stender, Policy Director & Deputy Legal Director at Equal Rights Advocates. “California has led the nation on equal pay protections and this bill is the next logical step to continue that progress and keep forging a path for other states to follow.”
“It's hard when you've poured your heart into doing amazing things for a company, only to find out that the men around you have been paid significantly more to do the same or less work. And it wasn't that the company decided to let us know there was this pay inequality, it was because one of my male peers told me his salary; which then led me to start asking questions about everyone's salaries. It was devastating to find out that so many women were making less than the men. I'll never forget being told "this is why we don't talk about salaries" when I brought everything up to my leadership team. It was not talking about pay that led to these inequalities. We need to be armed with knowledge of the inequalities we face so that we can advocate for ourselves and get fair treatment. The culture of silence with respect to wages only serves to maintain the status quo of inequity. That needs to end.” - Jessica Seifert (employed by Riot Games from 2014 – 2019. Her various job titles were Programs Manager; and Product and Data Manager).
SB 1162 is co-authored by Assemblymember Cristina Garcia, Chair of the California Legislative Women’s Caucus, and Senator Nancy Skinner, who is Vice Chair.
Monique Limón represents the 19th Senate District, which includes Santa Barbara, Ventura, Goleta, Buellton, Carpinteria, Guadalupe, Lompoc, Santa Maria, Solvang, Camarillo, Fillmore, Ojai, Oxnard, Santa Paula, and Port Hueneme. She currently serves as the Chair of the Senate Banking and Financial Institutions Committee and the Select Committee on the Nonprofit Sector.
2 See, e.g., Maria Recalde & Lise Vesterlund, Gender Differences in Negotiation and Policy for Improvement, National Bureau of Economic Research (Dec. 2020); Hannah Riley Bowles, Linda Babcock & Kathleen L. McGinn, Constraints and Triggers: Situational Mechanics of Gender in Negotiations, 89 J. PERSONALITY & SOC. PSYCH. 951, 955-56 (2005)