California won’t require companies to make salary data public despite pay equity concerns

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SACRAMENTO — 

California companies will not be required to make salary data public after a bill was weakened in a key fiscal committee in the state Legislature on Thursday.

Proposed legislation by Sen. Monique Limón (D-Santa Barbara) would have required the state to post salary data online for private employers with more than 250 workers, with a focus on gender, race and ethnicity.

But those requirements were stripped from the bill, without debate, in the fast-paced Assembly Appropriations Committee.

Limón called the last-minute amendments to the bill “disappointing, to say the least” and “a setback for women and people of color” but said she will continue to pursue pay equity measures in the future.

“Equal pay has been an issue for decades in this country, and certainly in the state of California. So while women and people of color will not get to see that information publicly because of what happened with the bill today, I’m in this for the long run,” Limón said when asked about the legislation at a reproductive rights event in San Francisco led by Vice President Kamala Harris on Thursday.

Some elements of SB 1162 survived, though, and would address pay transparency if signed by Gov. Gavin Newsom this month.

The bill would require employers to publicize pay scales, including during the hiring process, a move proponents said would prevent those who are historically underpaid from accepting lower salaries than their peers.

The bill would also strengthen the state’s enforcement of existing pay data requirements. In 2020, Newsom signed a bill that requires the state’s largest employers to collect wage data and report the information to the California Department of Fair Employment and Housing.

That information — which is statewide aggregate data and omits employer and employee identities — found that women, Latino and Black workers are overrepresented in the state’s lowest pay brackets, according to the first report released by the state this year.

The policy aims to ensure employers adhere to anti-discrimination laws. Nationally, women earned 83 cents for every dollar earned by men in 2020, according to U.S. census data.

The state has taken legal action against some companies, including JPMorgan Chase, after they failed to submit the required data.

Limón’s bill would strengthen the state’s enforcement of the law by fining companies for not complying.

A number of business groups, including the California Chamber of Commerce, opposed the bill, saying that publicly sharing pay data would lead to burdensome litigation, and that those potential legal costs would then limit employers’ ability to increase wages.

“Publicizing the data to target employers is a cynical and disingenuous manipulation” of the information, and is not a reliable measure of pay disparities, opponents said in a letter to lawmakers this month.

Denise Davis, spokesperson for the chamber, said Thursday that SB 1162 would be removed from its “job killer” list because of the new amendments but that the organization still opposes the bill.

Times staff writer Hannah Wiley contributed to this report.

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