Expansion of Pay Transparency by California Companies

If you are a California employer of 15 or more employees or a potential or existing employee in California, take note of this new Act on job postings, related to the information that companies must disclose. On January 1, 2023, SB 1162 (which, among other things, amends CA Labor Code Section 432.3) went into effect and it applies to all California employers with 15 or more employees. 

Under prior California law, employers were required to provide applicants with the pay scale for a position upon reasonable request. Now, employers with 15 or more employees must include the salary or hourly wage range the employer reasonably expects to pay for a position in any job posting. Notably, the law does not expressly say whether the 15 employee threshold counts only those employees located in California or all employees, regardless of state. But given the broad language of the law and how other employment laws in California have been interpreted, employers would be safe to assume the threshold counts all employees in all states. If the employer posts through a third party (e.g. LinkedIn, Indeed, etc.), pay scale information must be provided to that third party and included in third-party postings. This provision will likely apply to remote job postings where either the employer or employee may be located in California. Of note is that Colorado, New York City and Washington already have similar requirements in effect and other states have pending legislation on the horizon. SB 1162 also expands section 432.3 to require employers to provide its employees with the pay scale for the position in which the employee is currently employed, upon reasonable request.

Remedies for violation of pay scale disclosure in job postings include: aggrieved individuals may file a complaint with the Labor Commissioner within one year of learning of the violation; there’s a private right of action in court, which may include injunctive relief and any other relief the court deems appropriate; penalties between $100 & $10,000 per violation and an employer’s failure to keep records of the job title(s) and wage rate history for each employee for the duration of the employment, plus three years after termination creates a rebuttable presumption in favor of the employee’s claim. Interestingly, violations by small employers are subject to PAGA, which contains a 33 day cure period, while big companies (with 100 plus employees) are not.

Thus, job postings stating “competitive salary offered” should be expressly avoided! If you have questions regarding this new law, contact me to book a consultation today!