California’s Pay Transparency Law

Company News

Next One’s team recently attended PASCO of Sonoma County’s Legal Update and learned about the hot topic of California’s new pay transparency requirements. The requirement goes past pay ranges in job postings, it also has a reporting requirement, and the reports are due in May. Read more to learn about the requirement. 

California’s New Pay Disclosure Requirement

Effective January 1st, 2023, California’s Pay Transparency Law, under Labor Code 432.3 now requires employers to provide employees with pay scale information for their position and requires employers with 15 (or more) employees (only one of whom need be in California, including remote, hybrid, and onsite positions) to include pay scale information in job postings. The requirement also applies when the job posting is published by a third party.

“Pay scale” is defined as the “salary or hourly wage range that the employer reasonably expects to pay for the position.” Bonuses, tips, and other benefits are not needed or included in this definition. 

If the employer intends to pay a set hourly wage or piece rate, only that specific hourly wage rate or piece rate needs to be posted. However, if the position will be compensated in whole or in part by piece rate or by commission wages, that must be specified in the job posting.  

Employers must also maintain records of the following:

  1. Job title or titles of each employee*
  2. Employee’s wage rate history*
  3. Employee’s period of employment*

*Employers must maintain records for the duration of employment plus three years after the end of employment.

California Pay Data Reporting Requirements 

The new law also dramatically expands the employers’ pay data reporting obligations. The report is due on May 10, 2023, and then every second Wednesday in May thereafter.

For employers with multiple locations, an employer must submit a report for each location. The report must be in a format that allows the CRD to search and sort the information using readily available software like Microsoft Excel.

Next One staffing and our team remain ahead of the curve by participating in leading professional organizations such as PASCO of Sonoma County.

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