More than 200,000 California employers with 15 or more workers will be required to publicize the salary range on new job postings and give demographic pay reports to a state civil rights agency, thanks to a recently signed law that goes into effect in 2023.
This salary-range requirement applies both to postings made directly by a business, as well as postings made by a third party.
“The bill would require an employer with 15 or more employees that engages a third party to announce, post, publish, or otherwise make known a job posting to provide the pay scale to the third party and would require the third party to include the pay scale in the job posting,” the bill’s text reads.
The new requirements are mandated by a new bill signed into law by California Gov. Gavin Newsom Tuesday.
The law also requires businesses employing 100 or more third-party contractors to submit pay data broken down by race, gender and ethnicity, including the mean and median salary, to the California Civil Rights Agency. This expands existing pay data requirements for non-contractor employees.
Failure to file these reports by the second Wednesday of May will result in fines.
“This bill would permit a court to impose a civil penalty not to exceed one hundred dollars ($100) per employee upon any employer who fails to file the required report and not to exceed two hundred dollars ($200) per employee upon any employer for a subsequent failure to file the required report,” the law’s text reads.
Employees will also be entitled to ask their bosses about the salary range for the position they currently hold under the new law.
“California has the strongest equal pay laws in the nation. … These measures bring new transparency to tackle pay gaps,” Mr. Newsom said in a statement.
In addition to providing the California Civil Rights Agency with a fuller picture of how pay breaks down by demographic, the law could potentially have an upside for employers looking to avoid litigation.
“We believe this data can help companies comply with equal pay and anti-discrimination laws and have a more equitable workplace,” Jessica Ramey Stender, policy director at nonprofit Equal Rights Advocates, told CNBC.
The law, along with increasing pay transparency and equity advocacy, could start a domino effect of companies publicizing salaries for new positions.
“Momentum for pay transparency laws has only increased with advocacy for pay equity,” Anne Dana, a partner with King & Spalding LLP’s Global Human Capital & Compliance practice in New York, told Bloomberg Law.