Labor Commissioner Issues Pay Transparency FAQs Providing Clarity to Employers
Published: January 4, 2023
As we previously discussed here, beginning January 1, 2023, employers with at least 15 employees will be required to include a pay scale with any job posting. If employers use third-party services to post jobs, they will need to provide those third parties with the pay scale information so that it can be included in the job posting. While employers do not have to volunteer such information to existing employees without prompting, those employees are entitled to the same pay range for their own positions if requested. The requirement to provide pay ranges to existing employees upon request applies to all employers, regardless of size.
When SB 1162 (i.e. the pay transparency bill) was enacted, many employers were left with unanswered questions about the specifics of the pay scales they would be expected to provide beginning January 1st. The Labor Commissioner has since issued an expansive set of FAQs seeking to provide clarification for both employees and employers on pay transparency. The FAQs can be found here.
The FAQs make clear that the actual pay scale must be included in the job posting itself, it cannot be provided through a separately accessed link or QR code. The FAQs also clarify that the pay scale must be provided for any position that “may ever be filled in California, either in-person or remotely.”
The Labor Commissioner has further provided clarification as to what is considered a part of the pay scale. The law defines “pay scale” as “the salary or hourly wage that the employer reasonably expects to pay for the position.” The Labor Commissioner has now indicated in the FAQs that “[i]f the position’s hourly or salary wage is based on a piece rate or commission then the piece rate or commission range the employer reasonably expects to pay for the position must be included in the job posting.” However, the pay scale does not need to include bonuses, tips, or other benefits.
Employers should review the FAQs to ensure they have appropriately met the pay transparency requirements that took effect January 1st. Further, in light of the emphasis on equal pay and pay transparency, employers should work with legal counsel to audit their pay ranges to assess whether any discrepancies exist by race, ethnicity, or gender and if any discrepancies are found, take steps to address and correct those discrepancies.
Meagan Bainbridge discuss this topic further in an episode of California Employment News, here.