Skip to main content

Understanding California’s Pay Transparency Laws: What Employers Need to Know in 2024

October 17, 2024

As California continues to lead the charge on progressive labor regulations, one of the hottest topics in 2024 is pay transparency. The new laws, aimed at promoting equitable pay practices, have profound implications for employers across the state. Whether you’re a business owner or an HR professional, staying compliant with these new regulations is critical.

What is Pay Transparency?

Under SB 1162, effective January 1, 2023, California employers with 15 or more employees are now required to include pay scales in all job postings. This means businesses must be upfront about how much they expect to pay for a given position, promoting salary transparency across industries. In addition, current employees are entitled to request the pay scale for their current position.

These rules aim to narrow the gender and racial wage gaps by providing clear and accessible information about potential compensation. But that’s not all. Employers must also maintain pay records for each employee for the duration of their employment, plus three years after separation. Failing to comply can lead to significant fines and legal actions.

Who is Impacted?

  • Small to Medium-Sized Businesses: Employers with 15 or more workers must comply with the pay transparency mandate. Businesses with fewer than 15 employees are not required to include pay scales in job postings but are still encouraged to review their wage practices to avoid wage disparities.
  • Recruiters & Hiring Managers: Whether you’re hiring in-house or using a third-party recruiting agency, these laws apply to all job postings. Make sure job listings include pay ranges that reflect what you genuinely expect to pay.
  • Employees: Current employees can now request salary information about their position. This is a crucial step in empowering workers to negotiate fair wages.

Why Does This Matter?

Beyond compliance, pay transparency offers several benefits to both employers and employees:

  • Boost Employee Morale: When salary ranges are clear, employees feel valued and trust that they are being compensated fairly.
  • Reduce Wage Gaps: By openly posting salary ranges, employers minimize wage disparities, particularly those based on gender and ethnicity.
  • Attract Top Talent: Transparent pay scales attract job seekers who want to know upfront what they can expect, reducing unnecessary negotiations and speeding up the hiring process.

What Employers Should Do Now:

  1. Review Compensation Structures: Evaluate your existing wage and salary structures to ensure they are fair and compliant with the new regulations.
  2. Update Job Postings: If you haven’t already, make sure your job ads include pay ranges that align with market rates.
  3. Keep Accurate Records: Maintain detailed records of job titles and wage history for current and former employees, as required by SB 1162.

By embracing pay transparency, employers can not only stay compliant with California’s evolving labor laws but also foster a more equitable workplace that attracts top talent and promotes fairness across the board.

Free Case Evaluation







    By submitting this form, you agree to our use of your information as outlined in our Privacy Policy. We are committed to protecting your privacy and will not share or sell your personal data with any third party.

    5 Star Rating Google Badge

    Danny Yadidsion

    Labor Law PC

    Top rated employment and labor attorney in Los Angeles, California