New California Pay Transparency Law

Effective January 2023, California employers with 15 or more employees must disclose pay ranges in job postings for applicants and also to employees upon request. (See SB 1162 signed September 27, 2022.) California joins the ranks of Colorado, Connecticut, Maryland, Nevada, Rhode Island and Washington, all states with some form of pay transparency law. New York City has a law taking effect November 1, 2022.

California’s new law can help employees traditionally discriminated against. For example, US women currently make 17% less than male employees, and California women lose $87 billion each year due to the pay gap. With this new law, job holders and job seekers would now know the compensation range for jobs, data which levels the playing field and enables more effective pay negotiations.

I’ve seen California pay transparency laws make a difference. In 2018 California enacted a law prohibiting interviewers from asking what applicants made. Before then, employers commonly made offers based on prior salary history, but I’ve seen firsthand how the law stopped that practice. Now this latest pay transparency law goes further and will give applicants even more power.

In the future, even with compensation clearly posted and the guesswork taken out, I still recommend candidates research their worth. The range one can be paid is broad; so, arguments can still be raised why someone should make the top of or exceed the stated range, e.g., due to unique skills and experience the employer needs.