Pay Transparency is Law in California!

Contract workers—and all California workers—just won big in California! On Tuesday, September 27th, Governor Newsom signed the Pay Transparency for Pay Equity Act, SB 1162, into law. In case you missed it, this legislation does two big things: it requires companies to share salary ranges in job descriptions and expands pay data reporting to include contract workers.

By increasing pay transparency and requiring more equitable hiring practices, SB 1162 will help us better understand—and close—gender and racial wage gaps. TechEquity is proud to have co-sponsored this important piece of legislation, which addresses key issues identified through our Contract Worker Disparity Project.

Why contract workers?

In 2021, TechEquity conducted the largest ever survey on tech’s contingent workforce. Our original research indicated that contract workers earn a fraction of the pay of directly-hired tech workers—even when performing comparable roles. Moreover, the workers are more likely to be Black, Indigenous, Latinx, Asian, women, and nonbinary than the direct workforce. However, because the employers of record are third-party entities, often staffing agencies, many contract workers were not included in the state’s efforts to measure and address the gender and racial pay gap in California. 

Through the efforts of the bill’s author Senator Monique Limón, co-sponsoring organizations including the California Commission on the Status of Women and Girls, California Employment Lawyers Association, Equal Rights Advocates, National Employment Law Project, TechEquity Collaborative, and a broad coalition of workers’ rights and equal pay advocates—we are now able to bring greater transparency to much of the employment process.  

What does SB 1162 do?

SB1162 builds upon California’s existing Pay Data Reporting system and requires that: 

• Employers with 15 or more employees must include salary ranges in job postings
• Employers must provide the pay scale to employees for their current roles, upon request.  
• Employers with 100 or more contract workers, hired by a third-party, must report aggregate pay data broken down by job type, race, gender, and ethnicity; additionally, it requires companies to include the names of the third-party labor contractors that they utilize. 

According to the most recent analysis of pay data, in 2020 people of color in California lost $61 billion due to racial pay disparities and women lost $46 billion from the gender pay gap. TechEquity research found that contract workers driving revenue for large and profitable industries perform many of the same job functions as their directly-employed peers—but get paid less for the same work. A recent survey from NELP and Temp Worker Justice found that Black workers are 12.2% of the overall workforce, but 23.2% of temporary help and staffing agency workers. SB 1162 will shine light on these disparities and provide critical information to help close the wage gap. 

Research from the National Women’s Law Center shows that when salary ranges are disclosed upfront, women and people of color are more willing to negotiate and are more successful in negotiating, thus narrowing the wage gap. It will also make pay disparities clearer—to contingent workers, direct-hire workers, and to the state, advocates, and regulators. This victory would not be possible without the unflagging leadership and clear vision of Senator Limón. 

Who made this happen?

The Pay Transparency for Pay Equity Act was championed by incredible worker advocates, including the contract workers who shared their stories with TechEquity Collaborative, Alphabet Workers Union, Inland Empire Labor Council, Temp Worker Justice, Warehouse Workers Resource Center, Worksafe, as well as with the workers from Riot Games who testified in support of SB1162. 

The bill was also supported by: 

What’s next?

We’re now one step closer to equal pay for equal work for all Californians. As we celebrate this victory, we know that our work to bring daylight to workers’ wages and working conditions is not over. Senator Limón and the co-sponsoring organizations are committed to closing the racial and gender wage gap and we will continue to push to ensure that vision becomes reality for all Californians.