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:
9 to 5
ACCE Action (Alliance of Californians for Community Empowerment)
Alameda Labor Council
Alphabet Workers Union
American Association of University Women – California
American Federation of Labor and Congress of Industrial Unions, AFL-CIO
Asian Law Alliance
California Asset Building Coalition
California Child Care Resource and Referral Network
California Conference Board of The Amalgamated Transit Union
California Conference of Machinists
California Domestic Workers Coalition
California Healthy Nail Salon Collaborative
California Labor Federation, AFL-CIO
California Latinas for Reproductive Justice
California Legislative Women’s Caucus
California State Association of Electrical Workers
California State Pipe Trades Council
California Teamsters Public Affairs Council
California Women Lawyers
California Women’s Law Center
California Work & Family Coalition
Career Ladders Project
Child Care Law Center
Chinese Progressive Association
Clergy and Laity United for Economic Justice
Communication Workers of America, District 9
Consumer Attorneys of California
Contra Costa Labor Council
Disability Rights California
Economic Policy Institute Policy Center
Employee Rights Center
End Hunger Now!
Engineers and Scientists of California, IFPTE Local 20, AFL-CIO
Friends Committee on Legislation of California
Hispanas Organized for Political Equality
Human Impact Partners
Kim Center for Social Balance
LAANE (Los Angeles Alliance for A New Economy)
Legal Aid at Work
Mujeres Unidas Y Activas
Naral Pro-Choice California
National Association of Social Workers, California Chapter
National Council of Jewish Women-California
National Union of Healthcare Workers
National Women’s Law Center
National Women’s Political Caucus of California
Orange County Labor Federation, AFL-CIO
Raising CA Together
San Francisco Women’s Political Committee
San Mateo Labor Council
Santa Barbara Women Lawyers
Santa Barbara Women’s Political Committee
Santa Clara County Wage Theft Coalition
Service Employees International Union California
Stronger California Advocates Network
Temp Worker Justice
The Greenlining Institute
The Workers Lab
Unite Here International Union, AFL-CIO
United Food and Commercial Workers Union, Western States Council
Utility Workers of America
Utility Workers Union of America
Voices for Progress
Western Center on Law & Poverty
Western States Council Sheet Metal, Air, Rail and Transportation
Women’s Foundation of California
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.