Public Policy

This bill will extend California’s existing pay data reporting requirements to the temporary/contract workforce and strengthens pay transparency for all workers. Using that same policy framework, this bill would create the same transparency requirements for the growing temporary/contract workforce as currently exists for the direct-hire workforce. It requires annual reporting on the wage, race, gender, and ethnicity data within each job category. Last but not least, SB 1162 ensures that companies create a fair and equal playing field for all workers—by posting the salary in the job description and posting promotional opportunities to their existing employees before selecting a candidate.

Contract workers do not have the same job security, benefits, or legal protections as direct workers despite being a significant and growing portion of the economy. Reports from TechEquity Collaborative, Temp Worker Justice and the National Employment Law Project, and Working Partnerships USA make the case that these workers are more likely to be workers of color earning substandard wages. The truth, however, is that existing labor data including the Bureau of Labor Statistics and EEO-1 reports do not capture these workers in ways that allow us to systemically understand disparities, wage discrimination, and practices across industries.

In an era of untenable economic inequality, we need transparency for all workers; this bill seeks to give us a more holistic understanding of the California labor force.

This legislation is authored by Senator Limón with co-sponsoring organizations TechEquity Collaborative, California Employment Lawyers Association, Equal Rights Advocates, and National Employment Law Project.

In 2021, we convened a working group with labor unions, advocacy organizations, and researchers to examine the increasing use of contract work within the tech industry and beyond. This bill was born out of TechEquity’s research, the Contract Worker Disparity Project. The need for legislation to address the lack of transparency and data on contract work became clear, and the working group shifted its focus to craft a policy to shed light on contract work.

This is what the Pay Transparency for Pay Equity Act would do:

• Require employers with over 100 direct-hire employees and 100 contract workers to submit annual reports on both workforces, broken down by race, gender, ethnicity, and job category by May 2023.
• Require employers to include the median and mean hourly wage for each combination of race, gender, and ethnicity in each job category.
• Require employers to include the names of all entities supplying workers to the business.
• Apply the definition of “labor contractor” from AB 1897.
• Empower the Department of Fair Employment and Housing (DFEH) to assess non-compliance civil penalties up to $100 per employee for first failure to comply, and up to $200 per employee for future violations.
• Require employers to include the salary/pay range in job postings and promotion notices.
• Require employers to provide the salary/pay range to employees upon request.