California: Limited Guidance on Pay Transparency Law

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APPLIES TO

All Employers with CA Employees or Applicants

EFFECTIVE

January 1, 2023

  

QUESTIONS?

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(888) 378-2456
Key Takeaways

  • Covered employers with the possibility of hiring employees in California must comply with the state’s pay transparency law in job postings.
  • The California Labor Commissioner’s Office released additional guidance on the law’s requirements as it relates to covered employee count, pay scales, and remote work.
  • Violations of the law can result in civil penalties and damages in civil actions.

Discussion

The California Labor Commissioner’s Office updated its Frequently Asked Questions to clarify some elements of SB 1162, the new pay transparency law. SB 1162 went into effect on January 1, 2023. It requires employers with 15 or more employees to post a pay scale in open job advertisements and all employers to disclose pay ranges upon request and has additional requirements for the Annual Pay Data Report. Employers who were looking for more robust guidance will have to wait. In the interim, we have the below clarifications.

Employee Count. The Labor Commissioner clarified that employers should count employees for the 15-employee threshold as they do for the purposes of 2022 COVID-19 Supplemental Paid Sick Leave and the new minimum wage rates. This means the threshold applies when: 1) an employer reaches 15 employees at any point in a pay period; and 2) at least one employee is currently located in California. All employees, including those located out of state, count for the purpose of reaching the threshold.

Remote Work. The pay scale must be included in the job posting if the position can ever be filled in California whether in-person or remotely.

Pay Scale. The pay scale does not include bonuses, commissions, tips, or other benefits. If the hourly or salary wage is based on a piece rate or commission, then the piece rate or commission range must be included. Links and QR codes cannot be substituted for placing the wage information in the actual posting.

Remedies. Employees can file a claim or civil action for retaliation within one year of the retaliation.

Action Items

  1. Review SB 1162 and the additional guidance.
  2. Update job postings to comply with requirements.
  3. Train appropriate personnel on job posting requirements and pay data reporting.
  4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase