As of January 1, 2023, most California employers are now required to disclose pay scales for positions published in job postings. The new requirement stems from California's recently enhanced pay transparency legislation (SB 1162), signed into law by Governor Gavin Newsom on September 27, 2022 ("the Law"). The Law applies to employers with 15 or more employees (including part-time employees). More details regarding the Law can be found here.
Recently, the California Division of Labor Standards Enforcement (DLSE) published long-awaited updated FAQ guidance interpreting some of the vaguer provisions of the Law. A summary of the DLSE's updated Q&A guidance interpreting the Law is provided below.
How Does an Employer Determine If It Meets the 15 or More Employees Threshold?
If an employer has 15 or more employees nationwide with at least one employee located in California, the Law applies.
Does the Pay Scale Listed on a Job Posting Need to Include Bonuses, or Other Benefits?
The DLSE interprets the Law to require only the "salary or hourly wage range that the employer reasonably expects to pay for the position" and not bonuses or other benefits.
Does the Pay Scale Need to Include Piece Rate or Commission Wages?
Yes. If the job position compensates employees either in whole or in part based on a task, piece, or commission, the job posting must include the piece rate or commission range that the employer "reasonably expects to pay for the position."
Unfortunately, the DLSE did not provide clarity regarding how to determine the commission range for a particular job. Employers that are publishing a job posting for a commission-eligible position should seek legal counsel for guidance in this regard.
Does the Requirement to Post the Pay Scale Apply to a Job Posting That May Be Filled in California or Elsewhere?
Yes. The DLSE has interpreted the requirement to mean that the pay scale needs to be included in the job posting if the position "may ever be filled in California, either in-person or remotely."
Can the Job Posting Direct Viewers to Another Area to Find the Pay Scale?
No. The DLSE interprets the Law to require the pay scale for the position to be included directly within the job posting. Employers cannot require the viewer to go elsewhere to find the pay range.
As is evident from the above, many questions remain regarding the meaning of the Law's provisions. It is possible that the DLSE will update its FAQ guidance in the coming weeks or months, and Venable's Labor and Employment Group continues to monitor the site for such updates.