San Francisco has recently become one of the most protected areas in the United States for employee rights. With the passage of a new pay equity bill, employees can expect compensation discrimination to suffer a blow. Learn more about the new law protecting employee rights and find out how an employment lawyer can help workers whose rights have been violated.
As of January 1, 2023, California employers must follow several new legal requirements the state has enacted to promote California pay equity. These requirements are embedded in California's Pay Transparency for Pay Equity Act, also called Senate Bill 1162, and include the following:
California lawmakers intend for these requirements to promote pay equity in San Francisco. These requirements should help close the wage gap for workers who are disadvantaged through no fault of their own.
Once employers gather their documentation around pay structures, these requirements should streamline compensation, talent development, and hiring processes and help businesses run more efficiently. In 2023, more states in the U.S. must adhere to salary transparency laws, including Washington, Rhode Island, and California. Approximately 25% of all United States workers live in areas with pay range transparency laws.
Although this approach may feel drastic to employers, it has been used successfully for years. In 2021, Colorado implemented the country's first law that required companies to proactively list salary ranges on job listings for work that employees could do within the state.
Employers should expect employees to begin asking questions about their pay ranges. Employers should also expect their employees to see future job listings and react to the pay scale provided, particularly if current employees are making less than advertised.
If the pay range the employer provides to current employees or posts in ads is too broad, employees may accuse the employer of giving false information. Employees may also question who earns the pay scale's extreme upper and lower ends and why. However, employers are likely to receive immediate feedback if the employers' pay range is reasonable, but some employees fall outside the range.
Often, employees will discuss the new salary information with their colleagues. California state and federal law protect the discussion of wages. The protections forbid employers from preventing these conversations or punishing employees who discuss salary ranges.
These pay range discussions may result in employees discovering systematic pay inequality. If this occurs, employers may experience issues with union organizing, turnover, morale, or lawsuits.
Employers should expect to explain any perceived pay inequities, even if there are logical and legally valid reasons for the discrepancies.
An employer in San Francisco that has workers without documented pay ranges should start putting these pay ranges in order. There is a roughly five-month grace period to arrange the pay range systems. Some employers may need to hire outside help if the job is large or they lack comprehensive job descriptions and pay structures.
Employers need to ensure the following:
If an employer cannot complete these tasks within the time limit, they should consider hiring outside help. Otherwise, they may open the door to legal liability.
Workers in San Francisco have employee rights, which became significantly more robust in 2023. SB 1162 has been referred to as a "tsunami" law, making substantial changes to San Francisco's employment landscape. In some ways, SB 1162 goes further than any other pay equity bill to date.
The law took effect on January 1, 2023, but employers have until May 10, 2023, to submit their pay data reports. Penalties for non-compliance can reach up to $10,000 per violation. Additionally, this does not just affect San Francisco companies. Any qualified company with a single employee in California must abide by SB 1162.
SB 1162 was introduced to help improve pay equity in San Francisco. If an employee feels they are underpaid in their position, they can ask their employer questions about their pay range. If this range fails to add up compared to the pay scales their employer is providing on job listings, they may be a victim of pay inequity.
Employees who are underpaid compared to colleagues with similar experience and background can file a legal claim based on their employee rights. An employment attorney in San Francisco can help employees assert their rights legally.
Employees harmed by pay inequity can speak with a San Francisco employment rights attorney. A knowledgeable attorney is the best resource for judging a claim's strength. If the employee has a solid legal case against their employer, their employee rights lawyer can explain the available legal options for recourse.
