Want to know how much your colleagues earn? California could open the books of businesses

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“It’s very simple: you can’t solve a problem without seeing the data,” said Senator Monique Limón, a Santa Barbara Democrat who introduced the bill, in an interview. “Hiding the data gets us nowhere.”

But dozens of industry associations are pressing pro-business Democrats to reverse or kill the California measure, arguing that the data would be misleading and expose companies to costly litigation, and that it would drive some employers out of the job. ‘State. Democratic Gov. Gavin Newsom will face immense pressure to side with powerful competing interests – business and labor lobbies – if the bill makes it to his desk next month. Newsom has signed a 2020 salary disclosure law, but it does not publicly reveal company data.

“We plan to educate other members of the Legislative Assembly and the governor’s office about our position and why we think this is problematic,” said California Chamber of Commerce policy advocate Ashley Hoffman.

The bill would apply to businesses with 250 or more employees, including about 6,000 in California that employ 6.7 million workers, more than a third of the state’s workforce. But any large company that employs Californians, regardless of its headquarters, should share salary data for its state-based employees.

California has long been at the forefront of the workers’ rights movement. It became the first state to establish a $15 minimum wage and pushed companies to appoint more women and people of color to their boards — an effort that was recently struck down by the courts. Yet white men are far more likely to hold high-paying jobs than everyone else, and are often paid more even when the job title is the same.

The magnitude of this imbalance is staggering: Data collected by a state agency under California’s 2020 Salary Disclosure Act found that women earned $46 billion less than men in comparable positions in 2020, while people of color received $61 billion less than white workers for similar positions. works.

However, how each company is measured is hidden from public view, as the law keeps company-level information confidential and exempt from public records requests.

Limón’s bill would not only publish information by company, but would also extend disclosure requirements to temporary help agencies, marking the first time the burgeoning industry would be explicitly required to collect and report demographic data on workers. wages. His proposal would also require all but the smallest companies to include pay scales in job postings — as Colorado and New York City have done — and force employers to start changing rates. average hours by race, ethnicity and gender.

California has a history of exporting labor laws to other liberal states, and advocates hope Limón AC SB 1162 (21R) will lead to broader changes. But first it has to pass.

The California Chamber of Commerce has placed the legislation on its list of “job killers,” a label reserved for measures it considers the biggest threats to businesses. Only six of the 75 bills that earned this designation during Newsom’s first three years in office made it to his office, and he vetoed three of them.

Industry groups say they are unwilling to back down from their demand that Limón amend the bill to protect company names, a change that would essentially gut it. Limón called this position a non-starter.

Such policies compel organizations to address pay disparities, said Laura Kray, director of the Center for Equity, Gender, and Leadership at UC Berkeley, who highlighted the reporting requirements for women’s compensation. in the UK and Denmark. In the case of Denmark, the gender pay gap fell by 7% and the hiring of women increased by 5% in companies required to report salary data, according to a Harvard study Business Review.

“Having to justify these numbers – to the extent that discrepancies arise due to implicit bias or different access to opportunity – forces leaders to deal with them in a way they don’t. don’t have to do if they don’t report them,” Kray said.

But opponents of the California bill say it would blame individual companies too much for wage disparities when broader societal factors, including access to education, are also at play.

Hoffman argued that the salary data published in the bill would not take these factors into account and that it lumps jobs with vastly different salaries into broad categories.

Limón recently agreed to delay the implementation of the bill until 2025 for businesses with 1,000 or more employees, and later for smaller businesses. She said the change will give companies more time to explain discrepancies that appear in their data.

This change was not enough for CalChamber, which called the proposed strategy “shameful” and said it will make the companies targets for lawsuits.

“The court of public opinion is a big concern,” Hoffman said. “I know they said there was room for you to explain the data, but there’s a quote that says, ‘If you explain, you already lose. Our concern is what does this data actually show versus how it is going to be represented? »

Groups like the American Staffing Association, which represents staffing agencies that place temporary workers at companies, are also fighting the bill. The group said in a statement that any data collected from these companies would be misleading because agency workers complete different types and lengths of assignments for a variety of clients, resulting in different wages.

Labor rights groups say lawmakers’ lack of understanding of how recruitment agencies operate has allowed a rapidly growing segment of the labor market to avoid scrutiny.

The growing prevalence of temporary workers has made headlines in recent years, with a 2019 New York Times survey finding that more than half of Google’s workforce was not directly employed by the company. Organizations like the National Employment Law Project, which tracks data on temporary work, say such hiring practices are becoming more common across industries. The ASA estimates that the temporary employment industry in California is worth approximately $30 billion per year.

Employers should view releasing wage data as a chance to uncover and spot disparities, said Jessica Stender, policy director for Equal Rights Advocates, a San Francisco-based nonprofit that supports the project. of law.

It’s “only shameful,” she argued, “if there’s data to be ashamed of.”

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