Employers Must Disclose Pay Ranges in Job Postings in California
On September 27, 2022, California Governor Newsom signed SB 1162 (the “Act”) into law, requiring employers with 15 or more employees to disclose salary ranges on their job postings. California is the latest jurisdiction to join in this growing trend, following Colorado, New York City, and Washington State. Summarized below are key takeaways for employers with respect to the Act, as well as answers to some of the most frequently asked questions.
What does the Act require?
The Act requires employers with 15 or more employees to (1) include the pay scale for a position in any job posting; and (2) require third parties that announce, publish, or otherwise make known a job posting to include the pay scale in the job posting. “Pay scale” is defined as a salary or hourly wage the employer reasonably expects to pay for the position.
The Act also requires employers with 100 or more employees to report wages for each combination of race, ethnicity, and sex within each job category to the California Civil Rights Department. This will allow that department to ensure all businesses comply with California’s equal pay laws.
In addition, all employers must (1) provide the pay scale for a position to an applicant upon reasonable request; (2) provide an employee with the pay scale for their current position upon request; and (3) maintain records of job titles and wage history for each employee during the duration of employment, plus three years after the end of employment.
These new requirements supplement California’s existing salary history ban and requirement that employers provide the pay scale to applicants upon “reasonable request.”
Does the Act apply to my business?
The Act does not specify to which employers and/or job postings it applies. However, statutes elsewhere in the books broadly define “employer” as “every person engaged in any business or enterprise” in California with “one or more persons in service.” This likely includes employers with any employees working in California, not just employers headquartered or doing business in California with the number of California employees who meet the thresholds. Employers should consider whether their job postings advertise jobs that will be or could be done by an employee in California, even remotely, as these could be subject to the Act.
When do I have to comply?
The Act is effective January 1, 2023.
How do I prepare for these new requirements?
- Keep diligent records of job postings;
- Ensure that job postings reflect accurate pay scales;
- Consider conducting an equal pay audit to ensure compliance with California’s equal pay laws;
- Employers with a national presence or open to hiring remote workers that may live in California should consider whether they will adopt California’s requirements as protocol for all job postings, or only those available to California residents.
Taking such preemptive steps is particularly important because failure to comply with the Act could result in costly litigation. The Act allows aggrieved individuals to file a written complaint with the Labor Commissioner within one year after the date the person learned of the violation, or to bring a civil action for injunctive relief or any other relief the court deems appropriate. As a result, the Labor Commissioner may order civil penalties of between $100 and $10,000 per violation.
What other jurisdictions have salary disclosure laws?
Colorado and New York City have enacted similar salary disclosure laws. Washington state lawmakers enacted such a law this year, which will be effective January 1, 2023. In addition, New York state legislators passed a similar bill in June 2022, which the governor is expected to sign.
A handful of other states require employers to disclose salary ranges or at the time of application or hire. For more information on those laws or this latest California Act, please contact your local Quarles & Brady attorney, or
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