California Pay Transparency Update

January 12, 2023

The California Labor Commissioner’s office recently released guidance on California’s new pay scale disclosure requirements, which went into effect on January 1, 2023 (we discussed the state’s pay transparency law in a previous newsletter article – see here). California’s new pay transparency law, similar to those enacted by New York City and Colorado, requires that certain employers include in their job postings a reasonable pay scale. This new guidance clarifies several elements of the law.

Affected Employers

The pay transparency law applies to employers with 15 or more employees. The guidance clarifies how the Labor Commissioner will calculate this threshold.

An employer with 15 employees must comply with the California law if they have at least one employee located within the state. All employees of the employer are counted in this calculation, including all employees in each of the employer’s facilities and all out-of-state employees. If an employer reaches the 15-employee threshold at any point in a pay period, the employer must comply with the pay transparency law.

In addition, upon the request of a current employee, affected employers must provide a reasonable pay scale for the employee’s position.

Remote Positions

Affected employers must comply with the pay transparency law if the position could be filled by someone in California. This means that an employer who meets the employee threshold (15 employees total; one employee in California), must include pay range in a job posting for a position that may be performed in-person or remotely in California.

Reasonable Pay Scale

Job postings must include a reasonable pay wage range for the advertised position, whether that be a salary, hourly wage range, piece rate or commission range. Any other benefits such as bonuses or tips are not required to be including in the posting.

Takeaway

Pay transparency laws are on the rise, and employers advertising for remote positions need to be considerate of these new obligations.

 

If you have any questions about these pay transparency obligations, please reach out to us.

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