CA the Latest State to Require Salary Ranges in Job Postings
This week, California joined the small but growing list of jurisdictions requiring employers to include the salary range for open positions in their job postings. The bill signed by Gov. Gavin Newsom (SB 1162) takes effect on January 1, 2023, the same day Washington State implements a similar law. In both California and Washington, businesses with 15 or more employees will be required to disclose the pay scale for positions in any job posting. Beginning November 1, 2022, employers with one or more employee in New York City and a total workforce of four or more employees will also be required to make these disclosures. New York State could soon follow the City’s lead – a bill presently on the desk of the governor (S9427) would compel employers with four or more employees to include pay ranges, other forms of compensation (such as benefits), and
a job description in advertising for any job that can be performed at least in part in New York state.
Legislation of this sort is part of a push for greater pay transparency and is intended to help eliminate historic pay inequities tied to factors such as gender and race. These efforts haven’t been without some unintended backlash – after Colorado blazed a path in 2021 by requiring any employer with one or more employee in the state to disclose salary ranges in postings, employers with a national presence who wanted to continue keeping compensation data private responded by amending their job postings to exclude Coloradoans from consideration. Colorado has tried to counteract this by issuing interpretive guidance prohibiting covered employers from using such exclusions except where the work is to be performed at a non-Colorado worksite.
As long as Colorado remained an anomaly in requiring the disclosure of salary ranges, businesses who did not already have an employee in the state could avoid becoming a "covered employer" subject to the requirements by simply declining to hire any Colorado-based employees. With Washington, California, and New York City signing on to greater transparency requirements and the likelihood of New York State following suit, avoidance is no longer a practical long-term strategy for businesses with a national presence. These employers should consider adopting a standardized approach to salary transparency that is consistent with the trend toward disclosure. They should also consider a pay equity audit to identify and address any existing inequities and any deficiencies in the processes used to set and adjust salaries.