California’s new pay transparency law went into effect in January. However, it left many employers questioning how some of the most important provisions of the law would be interpreted. While the state Civil Rights Department has not yet issued guidance, the Labor Commissioner’s Office has updated its Frequency Asked Questions to address some of the ambiguity, including the following three important areas:

1. Employee Threshold – The new law applies to employers with 15 or more employees but does not specify how those employees should be counted. According to the Labor Commissioner, the calculation of the 15-employee threshold should be consistent with how an employer counts employees for the purposes of 2022 COVID-19 Supplemental Paid Sick Leave (SPSL). As such, an employee count includes when: a) an employer reaches 15 employees at any point in a pay period and b) at least one employee is currently located in California. Additionally, if an employer has more than one facility, all employees are counted, as well as out-of-state employees for purposes of making this calculation.
2. Remote Workers – The Labor Commissioner specified that the pay scale must be included in the job posting if the position may ever be filled in California—either in-person or remotely.
3. Define Pay Scale – Pay scale has been defined as the “salary or hourly wage range that the employer reasonably expects to pay for the position.” The Labor Commissioner clarified that pay scale does not include bonuses, commissions, tips, or other benefits. However, if pay for the position has some component of commission, then the piece rate or commission range the employer reasonably expects to pay for the position must be included in the job posting. Further, when disclosing pay scales, an employer must include the pay scale in the job posting itself. Links to the pay scale or QR codes with the information are not permitted in lieu of actually posting the information.

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