Employers in California may soon have to post salaries for job listings and publicly reveal pay scales by race, ethnicity and gender.
The state legislature passed a law Tuesday requiring all employers in the state to post salary ranges for open positions. It would also require companies with more than 100 employees to report pay scales by gender, race and ethnicity, data that California would then make public.
California Gov. Gavin Newsom has until Sept. 30 to sign or veto the bill.
“Disclosing salary ranges during hiring negotiations has been proven to narrow the wage gap,” said state Sen. Monique Limón, a Santa Barbara Democrat in a statement to USA TODAY. “I am hopeful that the governor will sign SB 1162 and take meaningful action to create an equitable economy that supports women, families, and people of color.”
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The California Chamber of Commerce opposed the bill and put it on its “Job Killers” list, saying it will encourage more lawsuits against businesses and make hiring “more burdensome.”
California joins other cities and states in enacting laws to force employers to hand over more compensation information. Employers oppose the growing movement, saying they are proponents of pay transparency and equity but don’t agree with how states and cities are going about it.
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“States and localities are moving to mitigate pay disparity, and it’s obviously gaining traction,” Michelle Holder, a labor economist whose research focuses on the Black community and women of color, told USA TODAY in February. “I am hopeful this momentum continues at the local and state levels, and perhaps works its way up to the federal level at some point.”
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What’s behind the national push for pay transparency? Pay equity.
A recent California study found that women made $46 billion less than men in similar positions in 2020. People of color were paid $61 billion less than white workers.
Women and people of color have historically been offered significantly lower salaries and corporations profit from underpaying them, said Holder, president and CEO of the Washington Center for Equitable Growth and associate professor of economics at the John Jay College of Criminal Justice in New York City.
At the current pace, women won’t close the pay gap with men until 2059, according to The Center for American Progress. And it could take a century for Black and Hispanic women.
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Disparate pay has helped widen the wealth gap. The median Black household owns nearly 90% less wealth than the median white household, according to Goldman Sachs research on Black women. Lower levels of earnings for Black households drive much of the racial gap.
Federal legislation that would have made it harder for employers to pay women less than their male co-workers was blocked last year by Senate Republicans who said the Paycheck Fairness Act would primarily benefit trial lawyers, not women.