New California law will require job postings to include salary ranges

California companies with 15 or more employees are required to list salary ranges for all job postings, under a law signed into law by Gov. Gavin Newsom this week.

Senate Bill 1162 is scheduled to take effect in May 2023, bringing California into line with states like Washington, Colorado and Connecticut, which have passed similar pay transparency laws in recent months. It builds on earlier law SB 973, signed in 2020, which required companies with more than 100 employees to submit payroll data to the state Department of Fair Employment and Housing.

“This is a big moment for California workers, especially women and people of color, who have long been affected by systemic injustices that have caused them to earn far less than their peers,” said Sen. Monique Limón (D-Goleta), the author of the bill. said in a statement Tuesday. “As we continue to build a sustainable economy, we must ensure that every worker is paid fairly.”

Supporters of the new law pointed to recent studies that analyzed payroll data collected under SB 973 and found widespread gender and racial injustices.

A study conducted by Trusaic, a software company that helps companies address the gender pay gap, found that women in California earned $46 billion less than men in 2020 and that people of color made $61 billion less than their white counterparts .

A separate study released by the state this year further showed that men made up 64% of the top earners, while women made up 36%, although men and women were employed on an equal footing. The study, which drew on data from more than 6 million workers, also found that Hispanic and Black workers were overrepresented in low-wage jobs earning $30,679 or less a year, while their White and Asian counterparts tended to earn more.

“One contributing factor to the pay gap is that pay differentials often remain “invisible” and worsen when no one is actively monitoring hiring practices,” according to the California Employment Lawyers Assn. wrote in support of SB 1162. “As a result, workers and in many cases the employers themselves – particularly in larger companies – may not be aware of the gender or race pay gap that exists among their workforce.”

When Equal Pay Day was introduced in the US in 1996, women earned about 74 cents for every dollar that a man earned. The gap has narrowed only slightly, with the 2020 census showing women earning about 83 cents on the dollar.

In recent years, the US women’s soccer team solved the problem with a successful push for pay equal to that of their male counterparts after suing the national soccer association.

This week, technology company Hewlett Packard Enterprise agreed to settle a more than $8 million class action lawsuit alleging wage discrimination against female employees. In 2020, the Los Angeles Times and its previous owner, Tribune Publishing, agreed to pay $3 million to Latino, Black, and female employees who claimed they were paid less than their white male counterparts.

The new law aims to give workers more say in wage negotiations. Lawmakers cited a study by the National Women’s Law Center that found that women and people of color were more willing to negotiate and more successful when companies disclosed salary ranges up front.

Workers can file a complaint if they believe a company is breaking the law. Employers who break the law can face a civil penalty of $100 to $10,000 per violation.

The new law also aims to collect more employment and payroll data and expand the companies that must provide such information to companies with more than 100 workers hired by agency workers.

Industries that rely heavily on contract labor, such as Services such as care and maintenance services often employ large numbers of immigrants, low-wage earners or other workers vulnerable to labor rights violations, lawmakers on the Senate Labor, Public Employment and Retirement Committee wrote in their analysis of the bill.

“This additional data could be important for anti-discrimination enforcement and targeted government programs,” the committee said.

The California Chamber of Commerce, which opposed the bill along with a variety of trade groups, protested part of an earlier version of the bill that would have given the state the authority to release a private company’s payroll data, which the group said was “target employer” in ” a cynical and disingenuous manipulation” of data. New California law will require job postings to include salary ranges

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