Pay transparency is becoming the wave of the future. That future is starting on Jan. 1, 2023, for California employers.
The new pay transparency law requires California employers with at least 15 employees to provide the pay range for any job listing. Further, it requires employers to provide this information to current employees if they ask for it. This lets people see where their offer or salary falls within what others in that position are earning.
Proponents of the law claim this will help eliminate discrepancies based on race, gender and more
The law also requires that any employer who has at least 100 workers whom they brought in through staffing agencies or as independent contractors submit pay data by race, gender and ethnicity to the California Civil Rights Agency to better determine where these inequities are occurring.
How the law can save employers from costly litigation
While this law is largely intended to benefit employees, it can also help employers become aware of unintentional pay discrepancies in their workforces – particularly those that place employees in protected categories in lower-paying jobs or at the low end of a pay scale. This can help employers correct these issues before they turn into discrimination or other legal matters.
While California is the largest state so far to enact this kind of law, it’s not the first. Colorado, Nevada and Washington are among the states that require some type of pay range disclosure – at least to applicants. New York City recently enacted its own pay transparency law.
If you have questions or concerns regarding your organization’s implementation of the new law or other employee issues that may emerge as a result, it’s wise to seek sound legal guidance.