What do I need to know about the pay scale disclosure law that went into effect on January 1?
The California Labor Commissioner’s office released frequently asked questions (FAQs) addressing some of employers’ lingering questions about the new pay scale disclosure requirements. These FAQs answer questions on job postings for remote positions, how to count your employees to see if you meet the 15-employee threshold and if a link or QR code can be used instead in an ad, among other topics.
As previously reported, SB 1162, effective January 1, 2023, requires employers to make pay scales available to job applicants and employees, in addition to expanding the state’s pay data reporting requirements.
In addition to the requirement that all employers provide pay scales to applicants and employees upon request (FAQs #27–28), employers with 15 or more employees must include the pay scale for the position in any job posting. And if the employer uses a third party to post or otherwise make known a job posting, it must provide the pay scale to the third party for them to include in the posting.
Job Postings for Remote Positions
One of the uncertainties around the law was whether this pay scale requirement for job postings was limited to positions whose physical location is in California or if it included remote positions.
In the FAQs, the Labor Commissioner clarifies that “the pay scale must be included within the job posting if the position may ever be filled in California, either in-person or remotely.” (FAQ #29)
Employee Count for Purposes of Coverage
When looking at how employers must count employees to see if they reach the 15-employee coverage threshold, the Labor Commissioner indicates that the requirement is consistent with how employers count employees for COVID-19 Supplemental Paid Sick Leave and minimum wage rates, as detailed in previous FAQs.
Applying that method, if an employer with 15 or more total employees has at least one employee currently located in California, then the pay scale disclosure requirements apply. (FAQ #30)
Pay Scale Specifics
The FAQs confirm that a pay scale means the salary or hourly wage range the employer reasonably expects to pay for a position. Additionally, the Labor Commissioner clarifies that an employer who intends to pay a set hourly amount or a set piece-rate amount, and not a pay range, may provide that set hourly or piece rate. (FAQ #31)
Other compensation or tangible benefits that are in addition to a salary or hourly wage (such as bonuses, tips or other benefits) are not required to be posted. (FAQ #32)
On the other hand, if the position’s hourly or salary wage is based on a piece-rate commission, then the piece-rate or commission range that the employer reasonably expects to pay for the position must be included in the job posting. (FAQ #33)
No Links or QR Codes
The Labor Commissioner specifies that employers cannot link to the salary range in an electronic posting or include a QR code in a paper posting that will take an applicant to the salary information. The pay scale must be included within the job posting. (FAQ #34)
The FAQs remind employers of their record retention requirements — beginning January 1, 2023, employers must keep records of a job title and wage history for each employee for the duration of employment plus three years after the end of employment. (FAQ #22)
Employers of all sizes should be prepared to provide pay scale information to applicants and employees when requested and maintain related records. Additionally, employers with 15 or more employees should have compliant job postings with appropriate pay scale disclosures, even if using a third party.
Individuals claiming to be aggrieved by a violation of the law can file a claim with the Labor Commissioner or a civil action, which could result in civil penalties ranging from $100 to $10,000, among other relief.
Column based on questions asked by callers on the Labor Law Helpline, a service to California Chamber of Commerce preferred and executive members. For expert explanations of labor laws and Cal/OSHA regulations, not legal counsel for specific situations, call (800) 348-2262 or submit your question at www.hrcalifornia.com.