Now Money Now – Pay Transparency is The Law!
One of the questions consistently asked by job seekers is “when is the proper time to ask about the rate of pay during the interview?” I always remind job seekers, that an interview is a two-way conversation and there is never a wrong time to inquire. If it’s something they want to know, they should certainly ask. If job seekers know they need a certain amount of money to maintain a lifestyle, and the job doesn’t meet the desired requirement, there is no need to go through the interview process. 10 years ago, I may have advised to wait until the interview when the employer asks, “do you have any questions?”, but in 2023, I say, “Go for it, during the initial phone/email screen!” If an employer is turned off by a job seeker asking this question, they were more than likely comfortable with low balling and the job seeker has dodged a bullet before making an investment of taking time off, a few hours of preparing to meet for a zoom call, or merely saved themselves a tank of gas! After all we are in the age of information. The rate of pay, should not a secret.
Governor Newson signed Senate Bill 1162, which became effective Jan 1, 2023. California now follows Colorado, Connecticut, Maryland, Nevada, Rhode Island, Washington, New York City, Cincinnati, and Toledo, among other jurisdictions, in enacting legislation to require employers to disclose wage information to job applicants, and in some instances, to current employees.
This new law imposes two significant requirements on covered employers: job-posting requirements and pay data disclosures. The law requires employers with 15 or more employees to include a pay scale in job postings. Companies with 100 or more employees must also report to the State the pay data of their employees and contractors by race, ethnicity and gender.
Both private and public employers must follow the new wage disclosure requirements for job postings. Newly revised Labor Code section 432.3 applies to employers with 15 or more employees. Covered employers are required to include a pay scale for the job opening being advertised. This includes third-party postings used by employers. Employers should be advised that if audited, their internal documents must match their job postings or they should prepare for a follow up visit which will include a series of fines.
The definition of pay scale in this law is broad and open to interpretation. The key to compliance is adhering to the salary or hourly wage range that the employer “reasonably expects to pay for the position”. The law is unclear whether this includes bonuses, commissions, health benefits or paid time off. Those variable factors could make a big difference in the amount disclosed.
When it comes to Pay scale requests. All covered employers must now provide current employees with a pay scale for their position upon request. Many employers will see likely see a barrage of requests from current employees and possibly unexpected increase inquiries based on the published pay rates.
A portion of existing law was quietly stricken as a result of this bill. Prior to enactment of SB1162, applicants for employment were already entitled to request the pay for an open position, but only if they had completed an initial interview with the employer. Now any applicant is entitled to this information upon reasonable request, without having to interview. An applicant is defined as someone who is “seeking employment with the employer and is not currently employed with that employer in any capacity or position.” The law does not differentiate between job seekers in general and someone who has submitted an application.
If you have 15 or more employee’s do yourself a favor and ensure that you are compliant in the area of pay transparency. Pay transparency laws are not Federally mandated, but many States have passed laws that may effect you (and your bottomline). Employers that violate the new disclosure requirements may be subject to a fine ranging from $100 to no more than $10,000 per violation. Yikes! Go ahead and Show The Money!
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