New law calls for pay transparency, equity

Samira Felix
Staff Writer

A state law that goes into effect Jan. 1 will require employers to provide current employees with the pay scale for their positions, and companies will also need to post the salary ranges for all job postings. 

The new law, Senate Bill 1162, authored by State Sen. Monique Limón, D-Santa Barbara, was signed by Gov. Gavin Newsom in September. It  is an expansion of Senate Bill 973, passed in September 2020, which required  employers with 100 or more employees to submit pay data reports  to the California Civil Rights Department, formerly known as the Department of Fair Employment and Housing.

Under the new law, the California Civil Rights Department will be able to publicize aggregate reports on an annual basis. And private employers with 100 or more employees will be required to provide the median and mean hourly rate broken down by demographics, including race ethnicity and sex,  within each job category in their pay data report.  

The new law will also require private employers with 100 or more employees hired through labor contractors to provide separate pay data reports for those employees. 

Sen. Connie M. Leyva, D-Chino, a co-author of the bill, explained that although the 2020 law was an important step, it did not require this information to be publicly available. 

With SB 1162, pay data reports will be available to the public, which will allow any disparities regarding pay equity to come to light, Leyva said. 

“Sometimes it’s about taking incremental steps, sometimes it’s about changing perception, sometimes it’s about creating a narrative,” Leyva said. “And this will help make sure that people know that there are pay disparities because people say all the time ‘there is no pay disparities anymore, women get paid the same as men’ and frankly it is not true.”

Andrea Amavisca, a legislative aide for Sen. Dave Cortese, D-San Jose, also co-author of the bill, said the goal of SB 1162 is to benefit women and minorities, who have been historically paid inequitable wages. 

Employers will also be required to provide an employee, upon request, the pay scale for the position they are in. Employers will need to maintain records of a job title and wage-rate history for each employee for a certain amount of time. 

“Anything that can make things more transparent, so that we can see the inequities and correct them a lot faster, I think ultimately it is going to be good for everybody regardless of which side of the employment equation that you are on,” said Sharon K. Davis, professor of sociology.

Companies with 15 or more employees will be required to provide the pay scale for a position in any job posting under the pending law. 

“It will be easier for applicants, men and women, to know what the salary range is, and it will hold employers accountable,” Leyva said. “They will have to be more honest and more transparent.”

Also under SB 1162, employers who fail to report the required information on the pay data report will have a civil penalty of  $100 imposed by the court. Employees will also have the ability to seek civil action if they believe their employer has broken the law. 

Leyva added that SB 1162 was difficult to get off the Senate floor and off the Assembly floor, so she believes that if there were more severe consequences for employers who violated the law it would have not gotten to the Governor’s desk.

“Unfortunately there is no hammer so to speak, but my hope would be that there is another bill that gets signed into law that creates a consequence,” Leyva said. 

Amavisca said that the bill is very powerful, but there is still a lot that needs to be done in order to dismantle the barriers that are in place for women and minorities.

“It is a step in the right direction,” Davis said. “It is our first in our journey towards equity, equality and justice in terms of salary and pay.” 

For more information on SB 1162, visit leginfo.legislature.ca.gov.

Samira Felix can be reached at samira.felix@laverne.edu.

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Samira Felix, a junior journalism major with a concentration in print-online journalism, is news editor for the Campus Times. She previously served as a staff writer.

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