In summary

Senate Bill 1162 — the Pay Transparency for Pay Equity Act — is a critical step to ensure that companies, policymakers and the public have the data they need to ensure contract workers are no longer a hidden part of California’s workforce.

By Gretchen Newsom, Special to CalMatters

Gretchen Newsom is an advocate of workers for IBEW Local Union 569 and serves on the California Employment Training Panel.

In the past year, three major workplace discrimination lawsuits that include contract workers (also known as temps, vendors, contingent workers and contractors) have been thrust into the spotlight. Riot Games settled for $100 million in a class-action gender discrimination suit. The State of California expanded its gender harassment lawsuit against Activision Blizzard to include contract workers who experienced sexual harassment, assault and discrimination. And a jury recently ordered Tesla to pay $137 million in damages to a Black contract worker who was subjected to intense racism and discrimination. 

Despite these high-profile suits costing companies millions of dollars, the average contract worker remains unknown and unprotected from exploitation. 

Contract workers play a vital role in California’s top companies. It’s time to close the loopholes that shield a $35 billion staffing industry from the same rules and regulations that every other private company has to follow. The American Staffing Association states that in 2021, staffing firms employed 1.9 million workers in California. Despite employing nearly one-tenth of the California workforce, the staffing industry often has been exempted from reporting on its workforce at both a state and federal level. 

Senate Bill 1162 — the Pay Transparency for Pay Equity Act — is a key step to ensure that companies, policymakers and the public have the data they need to ensure contract workers are no longer a hidden part of California’s workforce.

Californians have seen how this underground economy plays out in the construction trades. One study finds between 12.4% and 20.5% of construction workers are victims of payroll fraud. Their employers have cut corners by evading taxes, avoiding payments such as workers’ compensation, Social Security and Medicare, and failing to adhere to basic safety standards. These ploys not only hurt the workers they’re failing to support; they affect the economy and society they’re operating in by making the state pick up the pieces.

While the trade and tech industries seem worlds apart, contract workers in both are being mistreated and unsupported. Christopher Colley, a contract worker at Google and member of the Alphabet Workers Union, ensures that Google’s ad algorithms work — a service that helped generate about 81% of Google’s $257 billion in revenue in 2021. Despite Google’s commitment to ensure its contract workforce makes $15 an hour, Colley makes $10 an hour while providing skills that have helped the company achieve a valuation of $1.483 trillion — the fourth-largest market cap in the world.

Labor advocates spoke one-on-one with contract workers at myriad tech companies (the majority of whom asked to remain anonymous for fear that the contract would not get renewed), who shared that many of them receive no benefits, no companywide holidays, no sick pay and no vacation days in their contract.

Contract workers often found out that they were making a fraction of the pay their directly employed counterparts were making, for almost identical responsibilities. Similarly, in the construction trade industry, workers who aren’t protected by unions are vulnerable to economic and physical exploitation, such as repeated exposure to asbestos, which leads to cancer and other serious diseases. Contract workers are too often underpaid, undervalued, overlooked. 

Though we don’t yet have statewide data on contract workers, research indicates that our growing contract workforce is made up of our most marginalized residents. TechEquity Collaborative’s Contract Worker Disparity Project found that contract workers, who are disproportionately Black, indigenous, Latinx, Asian, women and nonbinary people, often are doing the same work as their directly employed peers while making less money, receiving fewer benefits and experiencing career immobility. Temp Worker Justice found that contract work perpetuates poverty rather than providing a pathway out of it.

We in the labor movement know that it’s past time for contract workers to be brought into the fold, to be protected by the policies that our lawmakers have worked so hard to implement for workers in California.

This issue isn’t just about contract workers’ rights — it is about all workers’ rights. It is about understanding and addressing the wage gaps that people — disproportionately women and people of color — experience because they’ve been locked into a line of work that doesn’t value their labor.

We need the Pay Transparency for Pay Equity Act so we can finally shine a light on this overlooked and underprotected class of workers.

We want to hear from you

Want to submit a guest commentary or reaction to an article we wrote? You can find our submission guidelines here. Please contact CalMatters with any commentary questions: commentary@calmatters.org