California Releases Guidance on Pay Scale Disclosures

Seyfarth Synopsis: As we blogged about previously, California handed a landmark pay back transparency legislation in September 2022. As promised, the Labor Commissioner’s business office has issued FAQs addressing significant employer questions concerning who is lined, info demanded to be disclosed, and information on distant career postings.

On December 27, 2022, the California Labor Commissioner’s business office produced eagerly expected Usually Asked Questions (“FAQs”) on the state’s new pay out scale disclosure needs less than the Equal Spend Act, which are powerful on January 1, 2023.

This advice clarifies some of the key outstanding thoughts on compliance with the needs introduced in SB 1162.

The FAQs explain which employers will be subject to the spend disclosure needs and the written content of the obligatory disclosures. Of notice, the FAQs do not make clear regardless of whether the needs only utilize to postings built on or after January 1, 2023, or if it will utilize to all postings that remain active as of January 1, 2023.

Who Should Comply?

Under Labor Code 432.3, “an employer with 15 or much more personnel ought to include the pay out scale for a place in any work submitting.” The FAQs explain that the Labor Commissioner will count workers applying the very same methodology used for Supplemental Compensated Ill Depart as spelled out in a previous FAQ (which in convert leans on the FAQs similar to California’s point out bare minimum wage demands)—i.e. applying the definition from Labor Code 1182.12, the disclosure prerequisites utilize if an employer has at the very least 1 employee located in California, so extensive as it employs “directly or indirectly, or by an agent or any other person” 15 or additional people.

Does This Use to Remote Postings?

If a place can be stuffed in California, possibly remotely or in particular person, then the fork out scale ought to be integrated in job postings.

What Need to Be Disclosed?

Shell out Scale Definition

The FAQs validate that a pay scale is constrained to the “salary or hourly wage array the employer fairly expects to fork out for a placement.” A set hourly charge or established piece price may be bundled in put of a fork out scale if an employer “intends to pay a established hourly sum or a set piece rate sum, and not a spend variety.”

Bonuses, suggestions, and other gains are not needed to be integrated in the fork out scale. Employers may voluntarily deliver information and facts on “compensation or tangible benefits provided in addition to a wage or hourly wage.” Nevertheless, companies ought to just take take note that the Labor Commissioner reminds employers that “other types of compensation may be regarded as for equivalent pay back needs.”

Mandatory Disclosure of Piece Level and Fee Compensation

In a somewhat unique Cal-peculiarity, wherever a person’s hourly or salary wages is dependent on a piece rate or fee, then the employer ought to contain the piece charge or fee variety the employer reasonably expects to fork out for the placement.

How Can Employers Make Disclosures?

In a essential departure from some of the other jurisdictions that have enacted fork out scale disclosure necessities, companies cannot url to the salary vary in an electronic posting or involve a QR code in a paper putting up. The pay scale need to be integrated on the putting up by itself.

Reminder of New Record Retention Requirement

In addition to the new spend scale disclosure requirements, an employer have to maintain information of a job title and wage amount historical past for each and every staff for the period of the employment as well as 3 a long time soon after the close of the employment. These data must be open up to inspection by the Labor Commissioner, which the Labor Commissioner will then use to ascertain no matter whether there is a sample of wage discrepancy.

What Must You Do to Get ready?

Businesses really should make certain that all occupation postings posted on or immediately after January 1, 2023, contain the demanded pay scale data. In certain, businesses who formerly intended to deliver links to the shell out scale really should rather contain the shell out scale specifically in the task postings.

It is essential to meticulously assessment postings ahead of they are designed, as companies who fall short to comply can be matter to penalties ranging from $100 and no additional than $10,000 per violation.

Place of work Solutions

Seyfarth’s Pay back Fairness Group is accessible support you in finalizing your shell out scale disclosures and can give assistance on any similar spend transparency issues. There is also no time like the existing to engage your teams in shell out assessments to make sure compliance with pay transparency legal guidelines in California, nationwide, and about the world, so be sure to really don’t wait to get to out to your preferred Seyfarth law firm to see what we can do to assist.