California has several pay transparency laws that create comprehensive requirements for employers. The laws are among the most comprehensive in the nation, having influenced similar legislation in other states.
SB 1162 (2023) – Primary Pay Transparency Law
Job Posting Requirements:
Employers with 15 or more employees must include salary or hourly wage ranges in all job postings, whether posted internally or externally. This applies to job postings on company websites, third-party job boards, and internal announcements. The range must reflect what the employer reasonably expects to pay for the position.
Current Employee Rights:
Upon request, employers must provide the pay scale for an employee’s position to current employees. This includes the salary or hourly wage range the employer reasonably expects to pay for the position.
Pay Data Reporting:
Private employers with 100 or more employees must submit annual pay data reports to the California Civil Rights Department, including median and mean hourly rates for each job category by race, ethnicity, and sex.
SB 973 – Pay Equity Reporting
Requires employers with 100+ employees to file annual pay data reports with detailed demographic breakdowns by job category, including statistics on pay gaps.
California Equal Pay Act
The California Equal Pay Act prohibits pay discrimination based on sex, race, or ethnicity for substantially similar work. Places burden of proof on employers to justify pay differences through legitimate business factors.
Labor Code Section 432.3
Prohibits employers from asking about salary history and requires disclosure of pay scales upon reasonable request during the interview process.
Key Compliance Points:
- Applies to remote work positions that could be performed in California
- Violations can result in civil penalties and private lawsuits
- “Good faith” compliance efforts are considered in penalty assessments
- Pay ranges must be realistic and based on actual expectations
Navigating California’s pay transparency laws doesn’t have to be difficult. With the right tools, HR teams can easily create, manage, and update pay bands for every role.
As one of the nation’s largest labor markets, California sets the tone for pay equity and compliance standards across the U.S. For an easy solution to create, manage, approve and update pay bands for your organization, see LaborIQ’s Pay Band Manager™
