California Governor Gavin Newsom signed a new law on September 27, 2022, requiring companies with 15 or more employees to post salary ranges on all job postings effective January 1, 2023. This also applies to third parties retained by the employer to announce, post, publish, or make known a job posting on behalf of the employer.

The amendment to California’s Senate Bill 1162 now aligns the state with other states that have passed similar pay transparency laws, such as Washington State, Colorado, and Connecticut.

This new law adds to the previous 2020 California legislation, Senate Bill 973, requiring companies with over 100 employees to submit pay data to the California Department of Fair Employment and Housing.

Senate Bill 1162 includes the following statements pertaining to this new requirement (see #3 and #5 in bold below):

SEC. 2.
Section 432.3 of the Labor Code, as amended by Section 320 of Chapter 615 of the Statutes of 2021, is amended to read:

432.3.
(a) An employer shall not rely on the salary history information of an applicant for employment as a  factor in determining whether to offer employment to an applicant or what salary to offer an applicant.

(b) An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant for employment.

(c) (1) An employer, upon reasonable request, shall provide the pay scale for a position to an applicant     applying for employment.

(2) An employer, upon request, shall provide an employee the pay scale for the position in which the employee is currently employed.

(3) An employer with 15 or more employees shall include the pay scale for a position in any job posting.

(4) An employer shall maintain records of a job title and wage rate history for each employee for the duration of the employment plus three years after the end of the employment in order for the Labor Commissioner to determine if there is still a pattern of wage discrepancy. These records shall be open to inspection by the Labor Commissioner.

(5) An employer with 15 or more employees that engages a third party to announce, post, publish, or otherwise make known a job posting shall provide the pay scale to the third party. The third party shall include the pay scale in the job posting.

As laws and regulations are updated, ERI stays on top of new and emerging regulations affecting compensation and total pay. Learn more about how ERI stays updated with the newest compensation trends and how tools, such as ERI’s Salary Assessor, help HR professionals benchmark compensation and ensure that total compensation remains competitive based on market rates by region.