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New FAQs Published for California’s Pay Transparency Law
Jan 11, 2023

New FAQs Published for California’s Pay Transparency Law

Topics: Employee Hiring, Discipline & Termination, Wage & Hour Issues

Just prior to the New Year, the California Labor Commissioner’s Office released updated Frequently Asked Questions (“FAQs”), which clarified the California Equal Pay Act’s pay scale disclosure requirements that were effective January 1, 2023. While the Equal Pay Act has been amended almost annually since its most significant revisions in 2016, these particular FAQs supplied further information on Senate Bill No. 1162 (“SB 1162”). SB 1162 requires certain California employers to disclose pay scale information and provide more robust pay data reporting. Our prior blog post on SB 1162 is here

California’s Pay Transparency Law, codified under Labor Code 432.3, now requires employers to provide employees with pay scale information for their position, and further requires employers with 15 or more employees (only one of whom need be in California, and includes remote, hybrid, as well as in-person positions) to affirmatively include pay scale information in job postings. Links to pay scales on a separate document or provision of a QR code are insufficient. “Pay scale” is defined as the “salary or hourly wage range that the employer reasonably expects to pay for the position.” Bonuses, tips, and other benefits are not included in this definition. If the employer intends to pay a set hourly wage or piece rate, only that specific hourly wage rate or piece rate need be posted. However, if the position will be compensated in whole or in part by piece rate or by commission wages, that must be specified in the job posting.  

The FAQs affirm SB 1162’s mandatory record-keeping rules for employers, that an employer must keep records of its employee’s job titles and wage rate history for the duration of each employee’s employment plus three years thereafter. These records must be open to inspection so that in the case of an Equal Pay Act Claim, the Labor Commissioner can then determine whether there is a pattern of wage discrepancy. If an employer fails to comply with these record-keeping obligations, the employee is entitled to a rebuttable presumption in favor of their Equal Pay Act claim. 

In short, covered employers should ensure that all job postings posted on or after January 1, 2023, contain the required pay scale information. Moreover, employers should include the pay scale directly in the job posting, as opposed to linking it or providing a QR code. It is unclear whether the pay scale disclosure requirements would necessitate the employer to add this information to job postings made before January 1, 2023 that are still available to applicants. However, employers should err on the side of caution and revise prior job postings to add pay scale information. Employers that violate the new disclosure requirements may be subject to a fine ranging from $100 to no more than $10,000 per violation. 

Contact the author of this article or your favorite CDF attorney if you need assistance in complying with the new pay scale disclosure requirements.

About CDF

For over 25 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

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About the Editor in Chief

Sacramento Office Managing Partner and Chair of CDF’s Traditional Labor Law Practice Group. Mark has been practicing labor and employment law in California for thirty years. His practice has a special emphasis on the representation of California employers in union-management relations and handling federal and state court litigation and administrative matters triggered by all types of employment-related disputes. He is also adept at providing creative and practical legal advice to help minimize the risks inherent in employing workers in California. He recently named “Sacramento Lawyer of the Year” in Employment Law-Management for 2021 by Best Lawyers®.
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