Employers in California are now required to post salary ranges in job listings, under a state law designed to address pay inequality among women and minorities.
The law also creates a new mandate for employers to disclose the salary range for their work to existing employees if they request it. And it requires companies to report new payroll and wage data to the state’s civil rights department.
“Studies show that when there is no salary range, men are more likely to ask for more money than women,” said Jahan Sagafi, a San Francisco labor attorney.
“Knowing what salary range goes into salary negotiations will help applicants, especially women and people of color, negotiate a fair wage,” he said. “If we can start negotiations with equal access to information and an equal understanding of what the job pays for, we’re likely to see fair outcomes based on merit, not … bias based on feelings, excitement and negotiating confidence.”
“We are not backing down from our work to ensure that all women in our state receive their entitlement,” Newsom said in a statement last week, hailing “new transparency to address pay inequality” as he signed Senate Bill 1162 into law.
Submitted data showing possible wage discrimination could “definitely” lead to legal action by state authorities against an employer, said Los Angeles labor attorney Shardé Skahan.
Wage disparities based on gender and ethnicity are an ongoing problem across the state. Across California, wage inequality is costing women tens of billions of dollars in 2020, with the worst inequalities occurring among women of color, according to a report by software company Trusaic, which backed the bill and helped companies address the gender pay gap.
Last week, HP Enterprise agreed to pay $8.5 million to settle a lawsuit accusing it of paying female California employees less than male workers. Google, the Mountain View-based digital advertising giant, agreed in June to pay $118 million to settle a class-action lawsuit over alleged gender pay gaps. Santa Clara-based computer chip giant Intel agreed in 2019 to pay $5 million to settle federal charges it discriminated against female, African American and Hispanic employees in pay.
Under the new law, companies with at least 15 employees must now include the salary range in every job advertisement. Employers don’t have to stay within the range, but in other jurisdictions like New York City, Colorado and Washington, where similar laws are in effect, paying below the lower end hasn’t been a problem, Sagafi said.
That’s “presumably because disclosing the range makes it easy for employees to reach the police (employers) and because it would be so clearly dishonest to go under the range that a company probably wouldn’t do it,” Sagafi said , whose company Outten & Golden normally represents workers in industrial disputes.
But employment attorney Skahan, whose law firm Seyfarth Shaw normally represents employers, said a company may hire someone below the pay range if “an employee’s qualifications do not justify what the pay scale dictates for the position.”
The new law makes California the largest state to require disclosure of payrolls in job postings, Skahan added.
Fines for violating the new law range from $100 to $10,000 per violation. Penalties will be waived for the first violation if the employer demonstrates that all open job postings have been updated to include the salary schedule.
Companies with 100 or more employees, many of whom were already required to provide state authorities with a non-public wage data report including the number of employees by race, ethnicity and gender within job categories and pay brackets, are now required to report median and mean hourly wages.” for any combination of race, ethnicity and gender within each occupational category,” the law said.
And for the first time, companies that employ 100 or more “contract workers” must report the wages of those workers, and they must provide the same detailed breakdown required for direct employees, including hourly wages.
Expanded data collection will help government agencies identify patterns of wage inequality, and for employers, “simple compilation of the data will reveal previously hidden wage differentials,” Sagafi said.
The bill originally required companies to disclose payroll data, but that requirement was removed after employers objected, with Seyfarth Shaw testifying before a legislative committee on behalf of corporate lobby group CalChamber. The group had strongly opposed such disclosure as the data could give a false impression of wrongdoing as it does not reflect different skill levels within broad job categories.
The law comes into effect on January 1st, and the salary information is due on May 10th.
https://www.ocregister.com/2022/10/04/employers-must-post-salary-ranges-under-new-california-law/ Employers are required to post salary ranges under California’s new law – Orange County Register