The SB1162 law, which will come into effect on January 1, seeks to cultivate transparency and indirectly bring the world of work closer to equal pay for men and women. It concerns companies with more than 15 employees, which represents 200,000 companies across California, or about 19 million workers, half the population.
Equivalent legislation already exists in Colorado, Rhode Island, Nevada, Connecticut or Maryland, but only for the mandatory part of the posting of the salary scale of the position on the job offer. It is only in effect in Colorado at the moment. However, only in California can company employees also access all of this information. Employers must also keep a history of the titles and salaries of each employee. The State of California must also be able to consult this data and reserves the right to impose a fine of up to $10,000 if this information is not available.
The author of the text of the law, Senator Monique Limon, believes that it is a “huge moment for California workers, especially women and people of color who have long been victims of systemic inequality”. In California, for example, a woman earns 88 cents when a man earns a dollar. The governor’s office estimates that every year women lose $87 billion to men. The gap widens even more for minorities. But Christina Garcia, who co-wrote the law, insists there is nothing for businesses to worry about “if they already do everything right”. For others, it is an opportunity to change their practices.
Since the pandemic, Americans have quit their jobs more easily than a few years ago, out of dissatisfaction or in search of a better salary. A movement that has been called “The great resignation”. A pay transparency law will therefore not help companies that underpay their employees. They may have to approach lawyers or jurists to ensure that they remain compliant with the law.
But an expert in labor law explains to the washington post that this transparency has potential advantages for a boss: to understand how much competitors are offering and to remain competitive on the job market, precisely in a context of full employment in the United States. The unemployment rate in September fell to 3.5%.
That said, for the rest of the country, this legislation will confirm the image of California, seen as the State of excessive regulations and the State where the employee always gains more power over the employer.