Understanding California’s New Pay Transparency Law

California’s Governor Gavin Newsom has officially signed the new pay transparency law, SB 1162. It will go into effect in 2023. This law is intended to help women and minorities pursue fair pay and close the wage gap. The bill will impact most companies that operate in California, so it should benefit almost all workers in the state.

As a worker, it’s in your best interest to understand how the new law will affect you, whether you’re job-hunting or not. Here’s what to know about SB 1162 and how it may help you fight for fair wages. 

New Requirements for Pay Transparency

SB 1162 is intended to make it easy for workers and government officials to determine whether a company pays its employees fairly. It will accomplish this in several ways, including:

  • Mandating pay ranges on job postings: All employers with 15 or more workers must provide pay ranges for roles in public job postings, allowing applicants to better negotiate their pay. Previously this information only needed to be shared if an applicant requested it.
  • Requiring employers to provide salary ranges to employees on request: Current employees can request that their employer share the salary range for their role, regardless of the organization’s size. This encourages companies to pay all employees fairly and allows workers to negotiate raises.
  • Expanding pay data reporting requirements: All employers with more than 100 employees or workers hired through labor contractors must report both mean and median hourly rates for each job category and each combination of race, ethnicity, and sex in an annual report. 

These new regulations make it easier for workers to negotiate fair pay and for the government to monitor companies for bias or discriminatory compensation practices

What to Do If Your Employer Isn’t Paying You Fairly

Starting in January, all companies hiring or employing California workers must comply with at least part of SB 1162. This is an excellent opportunity to determine if you’re being paid fairly for your work or have suffered from discriminatory practices. If you and your coworkers request salary ranges and discover that people in protected classes routinely receive less compensation, you may have grounds for legal action. 

To get started, collect salary range information. Talk to your colleagues and document their compensation and salary range responses from your employer. This helps demonstrate specific trends in how the company compensates workers.

Next, gather other evidence of discriminatory practices, such as withholding work opportunities or promotions from minorities. This helps show that the trend is broader than just compensation. 

Finally, consult with expert employment law attorneys like the team at Alexander Morrison + Fehr, LLP. We have the knowledge and experience to help you determine if you’re suffering from wage and hour discrimination and can help you and your colleagues file compensation claims individually or as a class action case. Reach out to discuss your case and your options for moving forward today.