Starting on Jan. 1, 2023, California’s new pay transparency law goes into effect. This law, which is similar to others that are already in effect throughout the country, is aimed in part at helping prospective and current employees ensure that their pay or the pay being offered is comparable to others doing the job within the organization.
Under the new law, any California employer with 15 or more employees is required to provide the pay range for any job listing, whether it’s on an online job site, in a newspaper, internally or anywhere else. This helps hold employers accountable for making wage or salary offers that aren’t below or above that range. Employers will also have to provide any employee who asks for the pay range of the job they’re currently holding with that information.
Requirements of the new law
The new law also requires employers who have a minimum of 100 employees whom they’ve recruited from staffing companies and/or working as independent contractors to provide pay information broken down by gender, race and ethnicity to the California Civil Rights Agency. This will help accomplish another goal of the law, which is to minimize inequities in pay based on these characteristics as well as others.
One supporter of the new law says, “Women, and especially women of color, are literally being robbed of wages every year. That is money that could go to rent, food, diapers, education, retirement savings.”
The law can help employers minimize costly litigation
While many employers may balk at the added time and effort required to comply with the law, it can potentially save them from wage and discrimination lawsuits. This newly required transparency can help employers see whether there are pay discrepancies either within or among job categories that disadvantage those in protected categories. While this may not be intentional, that doesn’t mean it’s not grounds for litigation – particularly if it’s obvious or widespread.
Whether you have questions about compliance with the new law or you’re facing potential litigation regarding unfair and potentially discriminatory pay practices, it’s wise to seek experienced legal guidance as soon as possible.