New Transparency law in California
Updated: Jan 23
As of January 1, employers with a minimum of 15 employees must include pay ranges in job listings, posted either by the employer themselves or by a third party.
In September 2022, California Governor Gavin Newson signed the latest pay transparency law, which was set to be in effect the following year. The new law expands on California's previous law, in which employers only needed to disclose pay ranges when asked by an applicant.
Employers must also keep up with new record-keeping requirements, regardless of the size of the company. An employer must maintain a record of employees' job titles and salary history during their employment.
A secondary part of the new law also states that businesses with more than 100 workers will have to submit more detailed data on their employees’ salaries, building on the 2020 law that forced companies to begin submitting data.
The new law is meant to help prevent pay disparities based on ethnicity, race, or gender.
Holly Martinez, executive director of the California Commission on the Status of Women and Girls, told NPR “Women were already experiencing a significant gender wage gap in California - 78 cents to the dollar.”
A fact, confirmed by the Office of Governor Gavin Newsom.
Similarly, research done by Pew Research Center, in 2015, highlighted the vast racial, and gender wage gaps that persist in the United States. With white men earning more in comparison to other employees.
But how are violations given and enforced?
Currently, there is no specification on how wide a pay range has to be without violating the law. California's Equal Pay Act, signed in 2015, defined equal pay as “the salary or hourly wage range that the employer reasonably expects to pay for the position.”
A violation of said law can result in a civil penalty ranging from $100-$10,000, while first offenses will be let off with a warning. Applicants also reserve the right to sue employees who refuse to disclose pay ranges, and/or list the pay ranges on job listings.
Junior Mario Sanchez, who is thinking of getting a job, states, “I didn't know this was something to pay attention to.”
The new law will help to keep new applicants properly informed about fair pay when looking at job listings.