New CA law aims to narrow wage gap, will require many employers to post pay scale in job postings

Starting January 1, 2023, many job postings in California should include more information on what they may pay.

"SB 1162 increases pay transparency in a number of important and concrete ways for both job applicants as well as existing employees," said Jessica Stender, policy director and deputy legal director at Equal Rights Advocates (ERA.)

The Pay Transparency for Pay Equity Act requires that companies with 15 or more employees include a pay scale for all job postings, and that employers provide a pay scale for the position a current employee holds upon request.

"We believe that this is fundamental to trying to narrow the pay gap," said California State Senator, Monique Limón (D-Santa Barbara,) who introduced the bill. "The pay gap between women and men, but also the pay gap that we see for some of our underrepresented communities."

A recent report by the National Women's Law Center highlights that research shows pay negotiations are notoriously unfavorable to women, and that salary range transparency helps close pay gaps.

"Having pay transparency is just one of many steps to end the gender wage gap. It requires changing culture in values, in practice," said Holly Martinez, executive director of the California Commission on the Status of Women and Girls.

The organization recently published a CA Blueprint for Women's Pandemic Recovery. It found that, among other things, "a significant number of households in California lived on incomes at or below the poverty line prior to the pandemic. Women of color were the first to lose jobs and last to regain them, causing long-term financial stress to their households."

Along with ERA, it was one of SB 1162's co-sponsors.

"Not only do we underpay female-dominated positions, but we also pay women less for those positions that they take up in those sectors. Male nurses versus female nurses, that's a really clear example. There's a lot of data around that," said Martinez.

Under current law, companies with 100 or more employees must submit a pay data report including race, ethnicity, gender and job category to the California Civil Rights Department. This helps uncover occupational segregation: when women and people of color are often concentrated in lower paying jobs, said Stender.

The new law will now require the same of companies with 100 or more contract employees.

"It really is a way that companies -- large companies in particular -- try to get around our equal pay laws, is by contracting out their work and essentially legally paying workers, who are often women and people of color, less for doing the same job as their direct-hire employees," she said.

Senator Limón, a commissioner on the California Commission for the Status of Women and Girls, stressed the law will benefit the state.

"When men and women get paid equitably, when they get paid for the work that they are doing in a complete and whole way, it helps the economy," she said.