Trend Alert: Closing the Wage Gap

Category: Blog Posts
Date: Jul 18, 2017 12:32 PM
Trend Alert: Closing the Wage Gap

In 2015, women earned 80% of what men earned, according to the United States Census Bureau.  The disparity is even more prevalent for women of color.  But California has taken steps to close the wage gap, including amendments to the Equal Pay Act in 2016 and 2017, and more equalizing legislation may be on the horizon.

As discussed in a previous blog post, California amended its version of the Equal Pay Act in 2016 to require equal pay for “substantially similar work when viewed as a composite of skill, effort, and responsibility, performed under similar working conditions” rather than equal pay for “equal” work.

However, unsurprisingly, the new legislation did not close the pay gap overnight.  In fact, according to a report released last fall, California state employees experience higher disparity (20.5%) in pay between female and male employees than private sector employees nationwide.

There is clearly still work to do, and the revamped Equal Pay Act may only be the beginning.

Last month, the San Francisco Board of Supervisors voted unanimously to adopt legislation that severely restricts San Francisco employers’ ability to consider salary history in the hiring process.  Specifically, the law prevents employers from asking job applicants how much they earned in previous positions, though they can inquire about an applicant’s salary expectations.  Under the new law, employers are also forbidden from considering an applicant’s salary history when deciding whether to make an offer and/or what salary to offer (unless the applicant disclosed salary information).  Similarly, the law prohibits employers from disclosing a current or former employee’s salary history without the employee’s written consent.  This law, which will take effect next summer but provides for a one-year grace period, applies to all San Francisco employers, including public agencies.

The theory behind this legislation is that taking salary history into account has a disproportionately negative impact on women, whose salaries have historically been lower as a result of the wage gap.  The hope is that if employers are not able to consider an applicant’s previous salary when deciding what salary to offer, they will instead base the salary offered on what is appropriate given market demands.  New York City, Philadelphia, and Massachusetts have all passed similar provisions over the last couple of years.

And California may be next. 

In May, the state Assembly voted to send Assembly Bill 168 to the Senate.  If it passes, the law would ban all California employers, including governmental employers, from asking applicants about their salary history and/or other compensation and benefit information.  Private employers would also be required to provide applicants the pay scale for the position, upon request.  Though similar legislation has failed twice in the recent past, last month the bill passed through the State Senate's Labor and Industrial Relations Committee.

Another pending bill that could impact the wage gap is AB 1209, which is being called the “Gender Pay Gap Transparency Act” and would take effect on July 1, 2020.  The law would require large employers (those with more than 250 employees) “to include gender pay data as part of their annual reporting to the Secretary of State.”  Specifically, covered employers would be required to analyze and publish the difference between the mean salary and median salary of male exempt employees and female exempt employees (broken down by job classification or title), as well as the difference between the mean compensation and median compensation for male board members and female board members.  This information would have to be updated yearly.  Notably, the Equal Employment Opportunity Commission requires private employers with 100 or more employees to submit similar information through what is known as an EEO-1 report.  This bill has passed through the state Assembly and is now pending in the Senate.

LCW will be monitoring this legislation closely as it moves through the Senate.

Contact Us

General Inquiries

info@lcwlegal.com

Contact a Specific Office

Our Locations

Media Inquiries

Please contact Cynthia Weldon, Director of Marketing & Training, 310.981.2000.

close

back