Beginning the next year 2023, companies in California with more than 15 workers will have to disclose salary ranges on their job listings, according to a new law states.
Signed by California governor Gavin Newsom on Tuesday (Sept. 27), the law not only mandates pay transparency during job hunts but also on the job. All employers in the Golden State will have to provide workers with a pay scale for their current job upon request.
The private sector has long kept pay scales hush-hush, likely to avoid an onslaught of lawsuits. But the practice has cost minorities dearly, fanning discrimination for years. While job listing portals like Glassdoor or Indeed include pay estimates for larger companies, exact information has rarely been readily available. The new law will ideally make California’s 200,000 companies with 15-plus employees more equitable. Over on the east coast, New York is also putting a similar pay transparency law into practice come November with the same hope.
“This is a big moment for California workers, especially women and people of color who have long been impacted by systemic inequities that have left them earning far less than their colleagues… As we continue to build a sustainable economy, we must ensure every worker is paid equitably.” —California state senator Monique Limón
Pay parity in California, by the numbers
88 cents: how much women make for every dollar men make in California
63 cents: how much Black women earn for every dollar a white man makes in California
$87 billion: how much women in the state lose to the pay gap every year, according to the national partnership for women and families
36%: share of women who were top earners at 100 California companies in 2020
3%: share of Black folk at the highest end of the pay scale—those making $128,960 or more—in 2020. Hispanic and Latino workers represented just 9% of this group. White people comprised half of the category, and Asians a third
With larger companies come larger obligations
Companies with more than 100 employees need to maintain records of wage rates, and they must submit a yearly pay data report broken down by race, sex, and ethnicity for each job category on or before the second week of May.
A whole bunch of California-headquartered corporate giants has faced pay discrimination lawsuits in the recent past. To name a few from this year:
In February, California’s Department of Fair Employment and Housing sued Elon Musk’s company, Tesla, over racism and harassment toward black employees. Tesla countersued in September. (Separately, the electric carmaker moved headquarters to Texas last year, so the new California law doesn’t apply to it.)
In June, Mountain View-based Google agreed to pay $118 million to settle a gender discrimination lawsuit.
In May, LinkedIn, which faced scrutiny over roles in San Francisco and Sunnyvale, reached a $1.8 million settlement with us department of labor for 686 female workers in California.