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Equity, Equality, and Pay Disclosure in California

By Alex Sirek on July 14, 2022 3:43 PM

Amidst persistent wage gaps and pay secrecy, a proposed California law attempts to even the playing field by mandating a public display of wage information.

Proponents say that this will not only improve pay disparities but gaps in opportunities as well.

California's Pay Disclosure Bill

The bill contains two main conditions: increasing pay scale transparency and improved pay reporting. The bill would require employers covered under the bill to include pay ranges on all job postings, giving applicants easy access to that information.

While California's pay scale transparency is not unique, with a combination of six other states and cities already requiring similar levels of wage disclosure on job postings, the improvement in pay reporting would place the state in a league of its own.

California currently requires companies with over 100 employees doing business in the state to file an annual pay data report to the state. If the new legislation passes and is signed into law, however, California would become the first state in the country requiring that reports for companies with 250 or more employees be public. This bill would also require employers to report gaps in hourly wages.

This measure could shine a light on wage gaps faced by marginalized individuals and potentially help to close those wage gaps. For example, covered companies would have to report what they pay men and women in similar positions or white and Black employees in similar positions.

As of writing, these records would remain hidden from the public. Though, the bill is still subject to changes and new amendments.

Closing the Opportunity Gap

The current American perspective of pay equity is based on the classic idea of "equal work for equal pay," which actually focuses more on equality rather than equity. The new California bill aims to change that.

Where equality insists on equal treatment of all people all the time, equity focuses on allocating more resources for people who have historically been at a disadvantage in the workplace.

The goal of equity measures is to provide marginalized individuals with the support they need to reach the same outcome as their more privileged peers.

An equity gap often comes in the form of a wage gap. But, it also takes the form of a lack of advancement opportunities for marginalized groups.

For example, if a company has a distinct lack of women of color in senior-level roles, that will be plain to see in the reports. In an effort to increase accountability, unlike in previous years, these records will be accessible to the public under the new legislation.

Endless Possibilities

More than likely, all companies are going to have gaps in pay and opportunity. What matters is how those companies close those gaps. Unlike wage gaps, which companies can solve relatively easily, dismantling systemic opportunity gaps obviously takes much more time.

It will take a large amount of time, preparation, and adequate action to adequately fix these issues. On the bright side, evidence shows that measures similar to this bill have shrunk gaps in pay, at least when it comes to gender.

For now, the bill still needs to pass the California State Assembly, before it would then go to the governor's desk. Whether it actually achieves results, however, we will have to wait and see.

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