By V. James DeSimone
On September 27, California Governor Gavin Newsom signed into law Senate Bill (SB) 1162, which will require nearly 200,000 California companies with 15 or more employees to disclose pay ranges starting next year. What does it mean for job seekers? Besides providing them with critical information before they pursue a job opportunity, it gives potential employees some assurance that they will not face pay discrimination because of their age, race, ethnicity, gender or other characteristic. When pay ranges are disclosed, it informs job seekers where to focus their efforts and provides confidence that they will be paid as much as any other applicant for that same job.
Even though the Equal Pay Act became U.S. law more than 50 years ago, pay disparities have been an ongoing blight on the American workplace. Pay disclosure laws could finally eliminate this blight. Such laws provide a host of important benefits, helping employers think through the value of the jobs they post while providing realistic expectations to those in the job market. Ultimately, requiring transparency of pay ranges could finally bring pay equity to the workplace where prior efforts have failed. It has been a long time coming.
It’s a well-known fact that women earn a lot less than men. For the year 2021 it was about 83% of what their male colleagues made, according to the Bureau of Labor Statistics. As alarming as that sounds, it’s nothing compared to how Black and Latino women have fared. The 2022 Equal Pay Day for Black women was September 21, meaning they had to work an extra 263 days to earn what White men earned in 2021.
The causes and reasons for pay disparities have been studied and documented at length. In some companies, women have been undervalued, relegated to subservient roles, and denied status in the workplace. Oftentimes, pay disparities are due to overt discrimination. And laws mandating equal pay – on the books in every state, as well as at the national level – will keep failing to close the gap as long as attitudes are unchanged and legal remedies are anemic.
But greater pay transparency could be the cure to address some of these failures. It isn’t rocket science, and it doesn’t require complicated economic calculations. If every company were to simply post the pay range for the jobs they sought to fill, the gap would actually begin to narrow. Laws to this effect have already been implemented, and data shows that the gender gap can move in the direction of closure as a result. According to the National Women’s Law Center, “Revealing a position’s salary range is an important negotiation prompt and provides some brake on pay discrimination in initial offers.”
Colorado adopted the first such law in 2021, requiring employers to include pay ranges in job postings. Early research shows that the law actually boosted labor force participation by 1.5%. In other words, Colorado employers had an easier time filling jobs because applicants felt better about applying for positions where the pay range was disclosed. This is no surprise given that 98% of all workers believe that employers should disclose salary information in job listings and more than half would refuse to even apply for a job if the salary range is not disclosed, according to a recent survey.
With a growing number of states enacting pay range disclosure laws, the results should be significant. In its letter supporting SB 1162, California’s pay range disclosure law, CELA and other advocacy groups stated as follows: “Research shows that when job applicants are clearly informed about the context for negotiations, including the salary range, women are more willing to negotiate, more successful in negotiating, and the gender wage gap narrows.”
All workers could be impacted by these laws. For multistate employers, we can expect to see pay ranges posted for all positions, regardless of where the worker resides. In addition, under SB 1162 employers will not only have to disclose pay ranges for new hires, but also for current employees who request the pay range for their own position. Armed with more pay information for the same or similar roles, this new law could provide current employees with a legitimate basis for negotiating higher pay for themselves.
Ultimately, these pay transparency laws should be a game-changer for closing wage gaps within companies. This is good for workers and good for employers – when employees know they are being treated fairly, morale and productivity rises, which are key factors in retaining employees who do a good job.
About V. James DeSimone
Civil rights attorney V. James DeSimone, of V. James DeSimone Law of Marina del Rey, has dedicated his 36-year law career to providing vigorous and ethical representation to achieve justice for those whose civil and constitutional rights are violated. His team represents individuals and families in employment, police misconduct, school abuse, and personal injury cases. You can find out more about their work at www.vjamesdesimonelaw.com