Ringing in the New Year: California clarifies new pay transparency law

At the start of every year, employers, employees, and even government agencies evaluate how they’re going to make the coming twelve months even better. At the start of 2023, the California Labor Commissioner’s Office did just that by releasing new guidance about California’s pay transparency requirements. We read it all so you don’t have to. Below are the most important takeaways: 

I have 15 or more employees, but only one of them works in California. Do I have to comply?

  • Yes, as we anticipated. The Labor Commissioner clarified that if an employer has 15 or more employees working anywhere and at least one of those employees works in California, then that employer must include salary ranges in job postings for jobs that can be performed in California, either in-person or remotely (looking at you, remote employers). 
  • Employers must also provide the salary range to any third party that they engage with to announce, post, or publish the job posting. For example, if an employer hires an outside recruiter to post their open roles, the employer must provide that outside recruiter with the salary ranges for those roles. 

What does “pay scale” include? Bonuses? Tips? Commissions?

  • “Pay scale” means the salary/hourly wage range the employer reasonably expects to pay for a role. 
  • Employers are not required to include bonuses, tips, or other fringe benefits (in contrast to Washington and Colorado’s laws). 
  • However, the “pay scale” does need to include a commission range for those roles where employees work wholly or in part on a commission basis. 

What happens if I, as an employer, violate this law? 

  • Individuals can bring a written complaint within one year after they’ve learned of the violation. 
  • You may be subject to civil penalties ranging from $100  to $10,000 per violation.  

What’s next?

Join us on January 26, 2023, for Episode 5 of our Pay Transparency Legislation Series: “Preparing for the New Year”, where we will talk about how to prepare for the emerging pay transparency legislation in 2023. 

To stay up to date on the latest pay transparency legislation in the United States, check out our legislation landing page.