California passes bill requiring salary ranges on job listings

Legislation also aims to tackle wage gaps around gender, race, and ethnicity

California lawmakers passed a bill that aims to promote pay equity by requiring employers to post salary ranges with job listings in the state.

The bill, SB 1162, "would require an employer with 15 or more employees to include the pay scale for a position in any job posting." It also would require companies to include median and mean hourly rates for each combination of race, ethnicity, and sex within each job category in their pay data reports to the state.

The legislation will become law in California if Governor Gavin Newsom signs the bill before September 30, 2022. Newsom has not expressed an opinion on the bill.

SB 1162 is similar to a Colorado law passed to deal with salary disparities. Colorado approved the Equal Pay for Equal Work Act in 2019 and created rules to implement the law in 2021. However, employers like DigitalOcean have ducked Colorado's rules by not offering certain positions to state residents.

Such defiance may become more difficult to sustain if California adopts SB 1162.

Wendy Musell, managing partner of law offices of Wendy Musell and counsel for employment-law specialists Levy Vinick Burrell Hyams LLP, told The Register in a phone interview that if California adopts these rules, she expects salary ranges to become more common in job ads.

"If this passes, I think we will see more job postings that show the salary range," said Musell, former chair of the California Employment Lawyers Association, which supported the bill. "It will also allow employees in current positions to request the salary range for their position."

The bill, she said, "is a major step toward pay equality but also equal opportunity."

The California Chamber of Commerce, a business-oriented lobbying group, opposes the bill as "unworkable," even after the removal of a clause that would have made all pay data public. The group claims the salary range disclosure requirement is "difficult if not impossible" to implement because the bill provides a private right to action to sue non-compliant companies, even when the infraction was the omission of salary data from a third-party job website.

The group also objects to the record keeping requirements and administrative burden of requiring employers to post all opportunities for promotion.

The purpose of the bill's salary disclosure and record keeping requirements is to reduce unequal pay. According to the US Census Bureau, "In 2020, women earned 83 cents to every dollar earned by men." Household median income by race and ethnicity also varies significantly [PDF].

The legislature of the State of New York has also passed a pay equity bill that currently awaits signature by New York Governor Kathy Hochul. ®