California’s pay transparency law took effect Jan. 1

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Being a responsible California employer means keeping up with a steady stream of new laws – most enacted to protect the rights of employees. By staying in compliance with these laws, you can help protect your business from costly and time-consuming litigation.

An important new law took effect Jan. 1 of the new year. It involves pay transparency – something that other states and most recently New York City have already taken steps to increase.

What the new law requires

Under the new law, any California employer who has at least 15 employees is required to list the hourly wage or salary range for any open job they advertise. This includes job ads on websites, in print and internally. This helps applicants see the minimum and maximum salary they can be offered – helping ensure that no one is offered less (or more) than the job is designated to pay.

The law also includes two other important provisions. It stipulates that employers provide this information to any current employee who asks about the pay range for their position (or any other one). It also requires any employer with 100 or more workers they’ve hired through a staffing company or brought in as independent contractors provide wage and salary data to the California Civil Rights Agency with a breakdown by race, ethnicity and gender.

Helping shed light on discriminatory pay discrepancies

The law is intended in part to help applicants and employees more effectively negotiate both starting pay and pay increases with their employers by removing some of the secrecy that often surrounds wage and salary information. It’s also intended to help lessen race and gender pay discrepancies that still exist in most industries. For example, here in California, women on average earn approximately 88 cents for every dollar a man earns, and that discrepancy is even higher for women of color.

While pay transparency is typically thought of as a benefit to workers, it can help employers also. The new law and the reporting required by it can help organizations see where they may have unintentional discrepancies that could – if not remedied – land them on the wrong end of a complaint. It may be helpful to seek legal guidance to help ensure that you’re properly implementing this new law and in full compliance with others.