A Warning To Businesses In California: Don’t Mess With The Quota For Females On Boards Of Directors

October 5, 2018 Admin Employment Law

California continues to push for diversity in companies doing business in the state, but it is getting a little too difficult to keep up with all the new laws that have been signed by California Governor Jerry Brown.

Just recently, Governor Brown signed Senate Bill 826 into law, which requires publicly-held corporations with principal executive offices in California to comply with a quota for the number of females on their boards of directors.

This is good news for all those females who have been excluded from the selection process when forming the boards of directors in their companies due to their gender. When the law comes into effect, businesses in California will no longer have an excuse to NOT have any women on their boards of directors.

If you think that the decision to appoint you to the board of directors in your company is long overdue, you, as a woman aspiring to get appointed, must certainly keep an eye on how your employer complies with the new law signed by Governor Brown.

How Many Females Must Be On The Board Of Directors

Our Los Angeles employment law attorney at Rager & Yoon – Employment Lawyers says that under the new law, California introduced phased requirements for qualifying businesses in the state:

  • By the end of 2019, each qualifying company must have at least one female director.
  • By the end of 2012, each qualifying company must increase the number of female directors to three persons as long as the company has six or more directors in total (for corporations with fewer directors, that number is reduced).

Penalties For Non-Compliant Companies In California

If your employer fails to comply with the new law, he or she will not only face a lawsuit from female workers who are legally required to be appointed in their company’s board of directors but may also face significant penalties.

Under the law, companies that fail to comply with the new requirements in California will be facing a fine of $100,000 for a first-time violation and $300,000 for any subsequent violations.

The Problem Of Underrepresentation Of Women On Boards Of Directors

“The new law has been long overdue,” says our experienced employment law attorney in Los Angeles. Statistics show that despite all the women’s rights movements in California, the underrepresentation of women on boards of directors remains a sore spot.

According to statistics, about 25 percent of California’s public companies in the Russell 3000 index does not have a single woman on their boards of directors. In the rest of the companies where women hold board seats, women account for only a little more than 15 percent of all board seats in their companies.

When discussing the bill, lawmakers in California underscored the economic benefits of having more females on boards of directors. Among other things, these benefits include women’s ability to create stronger governance structures that have higher levels of transparency.

One cannot deny the fact that having more women on boards of directors makes perfect sense. After all, women constitute more than half of the U.S. population. If you think that you are being discriminated against by your employer based on your gender, contact a Los Angeles employment law attorney immediately. Schedule a free consultation with our lawyers at Rager & Yoon – Employment Lawyers by calling at 310-527-6994.

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