January 9, 2023: -A new law that went into impact this week needs most California employers to disclose wages on job listings.
The law affects every firm with more than 15 employees, which looks to fill a job that could be performed in California. It covers hourly and temporary work, up to openings for highly paid technology executives.
Notably, these wage listings do not include any bonuses or equity grants, which many tech firms use to attract and retain employees.
California is the latest and most significant of the states and cities that have enacted which pays transparency laws, which include Colorado and New York City. But over 20% of Fortune 500 companies are based in California, including technology and media leaders. Advocates hope California’s recent law will be the tipping point that changes posting salary information into standard practice.
In the U.S., 13 cities and states require employers to share salary information, covering 1 in 4 workers, according to Payscale, a software comfort focusing on salary comparison.
California’s pay transparency law is intended to lessen gender and race pay gaps and helps minorities and women better compete in the labour market. For instance, people can compare their present pay with job listings with similar job titles and see if they are underpaid.
According to the U.S. Census, women earn 83 cents for every dollar a man gains.
“You’re going to need many different elements in place for men and women to get paid the identical for the same amount of work and the similar experience,” said Monique Limón, the California state senator sponsoring the recent law. “And one of those is transparency around wage ranges.”
But the recent disclosures under the law might only tell part of the story of what job salaries. Companies choose to display wide pay ranges, which include the spirit of the law, and the law doesn’t need companies to reveal gratuities or equity compensation.
The law could penalize ambitious workers who are gunning for more money as of their experience, the California Chamber of Commerce said in the previous year when opposing the bill. Some employers might need to be more open to posting pay to prevent bidding wars for top talent.