This story was originally published by Capitol Weekly
A broad coalition is lobbying California state lawmakers to pass a bill called the Pay Transparency for Pay Equity Act, which supporters say would bring greater transparency and fairness to workers’ and employers’ pay practices.
Existing law requires businesses with 100 or more employees to convey pay data to the California Department of Fair Employment and Housing. But backers of the latest bill, SB 1162 by state Sen. Monique Limón (D-Santa Barbara) say the current law is inadequate.
Under SB 1162, publicly disclosing salary and wage data for median and mean hourly rate would cover each combination of race, ethnicity, and sex within each job category. This metric includes direct hires and contract staffing employees, e.g., temporary workers. [UPDATE: A provision requiring publication of pay data was later removed from the bill.]
The American Staffing Association and the California Chamber of Commerce oppose SB 1162. Both employer-advocacy groups put SB 1162 on their list of job killer legislation.
“SB 1162 encourages litigation against employers based on the publication of broad, unreliable data collected by the state,” said Ashley Hoffman, a policy advocate for the California Chamber of Commerce.
“It undermines employers’ ability to hire, imposes burdensome administrative and record keeping requirements, and subjects employers to a private right of action and penalties under the Private Attorneys General Act,” she added.
Stephen Dwyer is the senior vice president and chief legal and operating officer of the American Staffing Association. He also takes a dim view of SB 1162.
“Requiring staffing agencies to submit temporary employee pay rate ranges based on demographic data not only will be administratively burdensome,” Dwyer said via email, “it will require staffing agencies to collect race, ethnicity and other demographic information that they do not currently collect. Government regulators, including in California, have long excluded temporary employees from such mandates.”
Dwyer continues. “Nor is such collection necessary or advisable in the context of pay scales; every temporary assignment is different, as are the associated pay rates. Staffing employees work in virtually all occupations in all skill and income levels. Thus, there are no apples-to-apples comparisons to be made when it comes to temporary employee wages, and any wage information provided by staffing agencies would be highly misleading.”
Roberto Clack is the executive director of Temp Worker Justice, and a backer of SB 1162.
“Despite the significant opposition from business we are optimistic that SB 1162 will pass this legislative session,” he wrote in an email. “Our bill is a priority for the California Legislative Caucus and we have strong support from labor groups such as the California Federation of Labor, the Alphabet Workers Union-Communications Workers of America, along with organizations such as the TechEquity Collaborative, Equal Rights Advocates and Worksafe.”
SB 1162, if it becomes the law in the Golden State, could pave the way for other states to pursue similar bills for pay transparency, extending to staffing agencies and contract positions, according to Clack.
“At Temp Worker Justice, we have seen for far too long that staffing agency employees are a second-tier workforce while often doing the exact same job for less pay and benefits as their direct-hire counterparts.
“There can be a strong correlation with race and gender in who fills these positions, and that’s why we have been able to build such a strong coalition that is fighting for pay transparency which has proven to help address pay gaps,” Clack said.
Temp Worker Justice recently released a report, California the Temp Work State, which shows in part that 3% of jobs in the state are temporary hires. California’s labor force is just under 19 million, meaning there are about 570,000 temporary workers in the Golden State, roughly the population of Wyoming.
According to TWJ’s report, “Temp jobs perpetuate poverty instead of providing a pathway out of it, and disproportionately impact women and people of color. By paying unequal wages for equal work, the temporary staffing industry is a key driver of the pay gap. In California, women lose $46 billion annually and people of color in California lose $61 billion annually to unequal pay.”
In a recent Workforce Confidence survey, LinkedIn examined salary transparency and contacted nearly 19,000 business professionals. About a fourth of those polled, from owners to vice presidents to C-suite managers, said they would avoid sharing their compensation figures. Lower down the employment food chain, the LinkedIn research reveals a striking contrast. “Younger workers and people lower on the pay ladder see pay transparency as a positive force,” according to LI editor George Anders.
Meanwhile, SB 1162, approved in May on a 27-9 vote in the Senate, has been sent to the Assembly floor and awaits a vote.
“Whether the law passes or not,” according to Clack, “we are going to continue to support policies and workplace organizing that works to change conditions for temp workers in the state of California and across the nation. We are also hoping to build a coalition even further. We are seeing this campaign as just the beginning of the process of raising awareness on this issue while building a base that can win real wins for temp workers.”