California Governor signs Pay Transparency for Pay Equity Act
Following up with a Law.360 report, Governor Gavin Newsome signed a new California law requiring employers to disclose salary ranges on job listings and could encourage many employers to voluntarily opt for transparency, attorneys say. The law seems to be aimed at employee leasing companies that provide thousands of employees in the state with employment. California employers with 15 or more employees must include in all their job ads a range of what they reasonably expect to pay for the role.
California Gov. Gavin Newsom approved and signed into law the Pay Transparency for Pay Equity Act [Senate Bill 1162], into law on Tuesday. It makes California the biggest and most populous player in a growing list of states and municipalities — including Colorado, Washington and New York City — that are implementing pay transparency laws in an effort to close gender and race pay gaps.
In addition to the salary range requirement, the new law says employers must share salary ranges with their current employees upon request, and it builds on existing pay data reporting requirements as of January 1, 2023 and the reporting deadline for the salary range data collection is expected in May 2023, pending any challenges to the law.
Job Listings Now Needs to Include Pay Ranges
As stated above, California employers with 15 or more employees must include in all their job listings a range of what they reasonably expect to pay for the role. It appears to some experts that the new law builds upon previous California pay equity legislation, such as a ban on asking applicants for their salary history. Most employers, like most law firms, list the pay range based on experience. Employers are supposed to list their reasonable estimates for the ranges in good faith, it might not always work out that way, she said. Our best estimate of employer compliance would include the company providing overly broad pay scale ranges to avoid being non-compliant and without room to negotiate pay as well as avoid litigation or costly fines.
Employees Can Access Pay Info Upon Request to the Employer
The new law also requires all California employers to disclose the salary range for a current employee’s position if that employee requests it. All employers must comply with this section, not just those with a certain number of employees. This will undoubtedly help employees with raises, which is a good thing for good employees.
Employers Will Have to Turn Over More Wage Data to the State
Causing new administrative burdens, employers with 100 or more contract workers — not independent contractors, but contracted employees such as those hired through staffing agencies (some of who we have represented briefly in the past) — must provide wage data on those workers to the California Civil Rights Department. It is unclear yet as to how and when litigation to enforce compliance will occur. The reports need to be broken down by (1) sex [male and female], (2) race and ethnicity according to the law. California employers with 100 or more employees already report this information for direct hires. This follows the data collection requirements of the Equal Employment Opportunity Commission [“EEOC”]. The EEOC regularly files actions against employers for pay discrimination.
According to experts reviewing the legislation, the California Civil Rights Department has “made it clear” that the reporting requirement applies broadly to employers around the country as long as they have at least 1 employee physically working here in California.
This is more work for employers in California but it will assist with the policy goals of equal pay for all workers and should result is some California employees getting a raise – a good thing!
If you have any questions about this article, Employee handbooks (we write them too), or have issues with unpaid wages, commissions, company charges to your wages, business expenses, off-the-clock work, or any issues with your pay at your current or former employer, please feel free to contact:
Richard E. Quintilone II, Esq. Kyle Gallego Esq. or Jeffrey T. Green, Esq.
Quintilone & Associates
22974 El Toro Road, Suite 100
Lake Forest CA 92630
Email [email protected] or [email protected] web www.quintlaw.com
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