What Californians should know about the new pay transparency law

On Behalf of | Jun 19, 2023 | Employment Law

Employees no longer have to whisper when comparing hourly wages or salaries with co-workers. Federal law prevents employers from prohibiting such discussions. 

As part of this movement towards greater transparency about income, some states, including California, have enacted “pay transparency” laws that mandate disclosure of salary ranges by employers. California’s law went into effect just this year. 

What the law requires

It requires employers with at least 15 employees to include the wage or salary range on any job listing. This includes external ads and listings (for example on online job sites) as well as internal postings.

The primary goal of these laws is to prevent employers from hiring new employees at a higher rate than current employees doing the same job are earning. It also helps prevent them from hiring someone at a rate well above the range because they are impressed with that person’s skills or experience.

The new law can also help California employers prevent legal issues regarding pay disparity. Sometimes, long-term employees go without much of a raise for many years even though the starting salary for their job has risen significantly since they began. Employers may not always realize that this disparity is occurring.

Reducing “systematic inequalities”

Another goal of the California law is to help close pay gaps that are based on gender, race and ethnicity. Private employers with at least 100 workers are required to regularly submit pay information based on those three categories or risk a fine of up to $10,000.

The state senator behind the law called it “a big moment for California workers, especially women and people of color who have long been impacted by systemic inequities that have left them earning far less than their colleagues.” 

The new law can provide employees who are not being paid fairly with important evidence to advocate for their rights with their employer. If your employer doesn’t make the situation right, it may help to have legal guidance to protect your rights. 


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