Implementing a new law in California that mandates businesses to include pay ranges in job descriptions has led to confusion among employers and employees. The law's impact was immediate, with Glassdoor analysis showing that 41% of daily active job listings in California had pay ranges provided by employers in early December. This figure rose to 54% by the end of the month and reached 61% by January 8th, just over a week after the law went into effect. In addition, to pay transparency requirements for job postings, the law also allows employees to request the salary range for their current position and imposes new obligations on companies regarding pay record-keeping and reporting to the state. Despite the law being in effect, there is still uncertainty surrounding its application and requirements. The California Chamber of Commerce has received at least one call per day from its members seeking clarification on the law. It has prompted the organization to hold an event on pay transparency law that drew over 2,000 registrants, 1.5 to 2 times its usual attendance. CalMatters also received inquiries about the new law and sought answers from the Department of Industrial Relations and employment law experts.
According to Jacklin Rad, a lawyer who counsels employers on California workplace laws at New York City-based law firm Jackson Lewis, the high number of employers seeking guidance on how to comply with pay equity laws is a sign that the rules are effective. Employers are reviewing their job postings to ensure compliance, examining their internal pay scales and ranges, and conducting pay equity analyses. Rad, who previously served as a Deputy Labor Commissioner for California, stated that companies are taking a closer look at their pay structures.
Which employers are required to post pay scales in job postings? According to the law, any employer with "15 or more employees" must include "the pay scale for a position in any job posting." The Labor Commissioner's office provides additional guidance on its website, indicating that at least one of those 15 employees must be in California. A pay range must be provided if the position could be filled in California, in-person or remotely.
Who can request their current salary range? Employees are entitled to request the salary range for their current position, and employers must provide it, regardless of size. However, it remains to be seen whether this applies to employees who work for California-based companies but do not reside in California.
Is there a limit to the size of a pay range considered legal? No, according to the Department of Industrial Relations, there is no limit. The law requires employers to post a degree that they "reasonably expect to pay for the job," and the determination of whether the range is reasonable will depend on the specific facts of each case. However, extensive ranges will face scrutiny to ensure compliance.
What should you do if you see a job posting that you believe violates the law? You may contact any field office of the labor commissioner in person, by phone (833-525-4635), or via email to bring it to their attention, and you may do so anonymously. The Department of Industrial Relations also permits anonymous retaliation complaints for alleged violations of the part of the law requiring pay scales in job postings. Still, it is unclear how to file such a complaint anonymously using the retaliation complaint form, and the department is yet to respond to inquiries.
Law enforcement will be divided among different branches of the state government. For instance, companies with 100 or more employees must provide more detailed data on worker pay to the Civil Rights Department, which uses the information to investigate complaints of pay discrimination and civil rights violations. If a company fails to submit the reports, the department can seek a court order requiring compliance and may also request a penalty.
On the other hand, the Labor Commissioner's Office is responsible for enforcing the part of the law that mandates pay ranges in job postings and enables employees to ask for their current pay scale. The Commissioner has started accepting complaints for violations of the law and will soon launch a social media campaign to inform employers. Those who want to report a breach can do so anonymously through the Department of Industrial Relations website or by contacting the Labor Commissioner's field office.
If a violation occurs, "aggrieved" individuals such as job seekers, applicants, or current employees can file a civil lawsuit. The size of the penalty will depend on the type of violation, but companies that don't have pay ranges in job postings will not be penalized for their first violation if they comply with the requirement.
