COMP NEWS – California has passed a new pay transparency law that will require businesses with fifteen or more employees to disclose salary expectations in their job postings.
Job seekers in California will no longer have to take a shot in the dark when asked about their salary expectations. Effective January 1, 2023, employers with fifteen or more employees will soon be required to post the minimum and maximum salary range for any job within the state. The state’s pay transparency law aims to help alleviate sex-based wage disparities by establishing a level field for pay practices.
Since 2018 all employers in California have been required to disclose a position’s pay scale to applicants for employment upon request. While that requirement will remain in place, California’s State Bill 1162 amends Labor Code Section 432.3 and requires that employers with fifteen or more employees also include a pay scale in all job postings, including those posted on third-party platforms. A pay scale is a salary or hourly wage range that the employer reasonably expects to pay for the position.
California is not the first jurisdiction to implement similar pay transparency laws. Several other states, including Connecticut, Maryland, Nevada, and Rhode Island, have passed similar pay transparency legislation.
California is the sixth jurisdiction behind Colorado, Ithaca, NY, Jersey City, NJ, New York City, NY, and Westchester County, NY, requiring wage transparency in job postings. Seven other jurisdictions: Connecticut, Maryland, Nevada, Rhode Island, Washington, Cincinnati, OH, and Toledo, OH, require that employers disclose wage ranges upon request.
Additionally, the legislation passed also includes greater pay data reporting requirements for employers with 100 or more employees.
California’s new law also places additional pay data reporting requirements on employers to promote greater transparency. By May 10, 2023, employers with 100 or more employees must submit updated pay data reports using 2022 compensation information to the California Civil Rights Department, including mean and median hourly rates by each combination of race, ethnicity, and sex for its workers.
To read more about California’s pay transparency law, click here.
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