California Labor Commissioner Releases Pay Transparency FAQs
As we previously reported here, California employers with 15 or more employees are required to post salary ranges on job postings as of January 1, 2023 (i.e. next week!). The Labor Commissioner has provided additional guidance as to how these requirements will be interpreted.
The law requires employers to post pay scales on all job postings even if the employer engages a third party to promote or publish the job posting. The FAQs emphasize that the pay range must be included in the posting; thus, a QR code or hyperlink that takes the applicant to another page with the pay range is not sufficient.
As more employers offer remote positions that could be performed in another state, the FAQs also clarify that the law applies even if the position only might be filled in California, while specifically noting the requirement applies to both in-person and remote positions.
Additional clarification was also given to the meaning of “pay scale,” which the law defines as the salary or hourly wage range the employer reasonably expects to pay for the position. For fixed-pay positions, the employer should post the fixed wage or salary. If applicable, the pay scale must also include piece rate and/or commission wages; however, an employer need not post additional compensation (e.g. bonuses, tips, or other benefits).
Employers uncertain how to count employees should look to the Labor Commissioner’s guidance on counting employees for the 2017-2023 minimum wage phase in requirements. In short, employers should err on the side of posting the pay ranges because the courts will generally look for a reasonable interpretation that is most favorable to workers and an incorrect decision could lead to costly penalties. Note, however, that “bona fide” independent contractors do not count towards the 15-employee minimum threshold.
Overall, California employers should carefully review the FAQs and/or consult with counsel to ensure they are in compliance with the new pay transparency law.