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California Enacts Broad Pay Transparency Law


Effective January 1, 2023: California employers with 15 or more employees must include a pay scale in their job postings. Additionally, in a first-of-its-kind provision in the country, private employers with at least 100 employees must also report an annual pay data report with average pay rates of their employees and contractors by race, ethnicity, and gender to the California Civil Rights Department.

California Fair Pay Act

California has a long history of implementing salary requirements in the state. The California Fair Pay Act, based on equal gender pay, went into effect on January 1, 2016.  The law was amended (effective January 1, 2017) based on equal race and ethnicity pay, then amended (effective January 1, 2018) to prohibit employers from requesting applicant salary and require them to provide a pay scale for open positions, and then amended again (effective January 1, 2019) to provide clarification on the term “pay scale.”

Previously, employers were only required to provide an applicant with a pay range upon reasonable request; however, under the new law, they must include the salary or hourly wage range that the employer reasonably expects to pay for the position in all job postings. The new law also requires employers to provide current employees (upon request) with the pay scale for their positions.

Click here for more information on the new law.

In preparing to meet these broad requirements, employers should consider conducting a pay equity audit, determine salary ranges for all positions, ensure all job postings include the required pay scale information, and ensure record maintenance policies comply with the new requirements.

Have any questions? Hire Image can help. Contact us if you have any concerns about how these types of pay transparency laws impact your own background screening practices.

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