New California Pay Transparency Law 2023
California employers should be aware that starting January 1, 2023, employers with 15 or more employees must include a pay scale in job postings. The Labor Commissioner recently posted FAQs about the new law, which include the following guidance:
• In determining whether a business has 15 or more employees, all employees are included, regardless of the number of hours worked or location. This means that employees outside the state of California count toward the 15-employee threshold. The Labor Commissioner appears to take the position that employees obtained from staffing agencies should be included along with direct hires in an employer’s employee count.
• The pay scale is defined as “the salary or hourly wage range that the employer reasonably expects to pay for the position.” If the employer intends to pay a set hourly rate or set piece rate, the employer may list that set rate, rather than a pay range. If an employee will be paid on a commission basis, the commission rate must be included in the posting.
• The pay scale is not required to include bonuses, tips, or other benefits (although such information may make recruiting efforts more competitive).
• The Labor Commissioner takes the position that the pay scale must be posted for any position that “may ever be filled in California, either in person or remotely.”
• The Labor Commissioner takes the position that the pay scale must be included within the job posting; the employer cannot provide a QR code or link that will take an applicant to the salary information.
Employers should be aware of and abide by the posting requirements (and other Equal Pay Act provisions) in order to avoid claims filed by employees with the Labor Commissioner’s office or in court.
The full list of the Labor Commissioner’s FAQs can be found here. The text of SB 1162 can be found here.
The Employment Attorneys at Call & Jensen are available to assist you with questions about the new pay scale law or any other employment questions you may have.
The foregoing is intended as general information only. For legal advice specific to your situation, please consult employment counsel.