What California Job Applicants and Employees Need to Know About the State’s New Pay Transparency Law

As of January 1, 2023, California job seekers and employees have access to more information and greater transparency regarding salaries and wages. In an effort to further promote pay equity, California adopted a law (SB 1162) last year requiring employers to include pay ranges in all job postings and advertisements and to provide pay scale information to current employees upon request.

California is part of a growing list of states, including Washington, New York, and Colorado, that require employers to put their compensation cards on the table. The new law will help applicants and employees learn whether they are being treated fairly as to their compensation compared to similarly situated colleagues, and if not, avail themselves of the rights and remedies in the state’s Equal Pay Act.

Job Postings

Prior to the enactment of the new law, employers only had to provide job applicants with pay scale information about a position upon the applicant’s request. Now, California employers with 15 or more employees must publish the pay scale for a position in any posting or advertisement. If an employer uses a third party to publish or post a job opening, that third party must include the pay scale in the posting.

“Pay scale” is defined in the statute as the “salary or hourly wage range that the employer reasonably expects to pay for the position.” An employer who intends to pay a fixed hourly amount or a set piece rate amount may provide that set hourly rate or set piece rate instead of a pay range. If a position’s hourly wage or salary is based on commission, the posting must include the commission range the employer reasonably expects to pay.

Salary and Wage Information for Current Employees

The transparency required by the new law also applies to current employees. Regardless of their workforce size, all California employers must provide a current employee with the pay scale for their position upon the employee’s request.

Additionally, all employers must maintain records of job title and wage history for each current employee for the duration of their employment and three years after that so the state’s labor commissioner can “determine if there is still a pattern of wage discrepancy” that may merit intervention and action by the state to address the issue.

Remedies and Protections for Applicants and Employees

Employees and applicants who believe an employer failed to comply with the new law’s pay disclosure requirements can file a complaint with the California Division of Labor Standards Enforcement (DLSE) within one year of the date they learned of the violation or file a civil action for injunctive and other relief. Employers are prohibited from retaliating against an employee who asserts violations of the law. An employee subjected to retaliation can file a civil action in court within one year and seek reinstatement, back pay, interest on back pay, and other potential remedies. 

At Outten & Golden, we are committed to making pay disparity in gender, race, and other protected classes a thing of the past. If you have questions about California’s pay transparency law or have concerns about wage discrimination, please contact us today.

(*Prior results do not guarantee a similar outcome.)