The California Department of Industrial Relations has issued new FAQs to clarify its interpretation of California’s new pay transparency requirements.
Among other updates, the new FAQs provide additional guidance on:
- Coverage. Employers with at least 15 employees – and at least one employee in California – must include the pay scale on job postings beginning January 1, 2023.
- Counting of employees. When evaluating if an employer has at least 15 employees, the employer would count any individual performing any kind of compensable work for the employer who is not a bona fide independent contractor as an employee, including salaried executives, part-time workers, minors, and new hires.
- “Pay scale” definition. Consistent with the text of the statute, the term “pay scale” only requires disclosure of the salary or hourly wage range the employer reasonably expects to pay for the position – and not other types of compensation or benefits. But the pay scale must include piece rate or commission wages.
- Postings that require pay scale disclosures. An employer must include the pay scale in job postings for roles that may be filled in California, either in-person or remotely.
- Use of links for disclosures. An employer may not 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 – it must be stated in the posting itself.
- Record retention. An employer must keep records of a job title and wage rate history for each employee throughout their employment, plus three years after. The records must be open to inspection by the Labor Commissioner to determine whether there is still a pattern of wage discrepancy.
- Penalties. Pay transparency violations may be subject to civil penalties of no less than $100 and no more than $10,000 per violation.
With this new guidance in place, employers should review current job postings and begin making updates by January 1, 2023, to ensure compliance with California’s pay transparency requirements.
Please contact a Jackson Lewis attorney for any questions on compliance with pay transparency laws and preparatory steps to take as such laws are expected to continue to spread.