Employers in California with more than 15 employees will be required to post salary ranges on job advertisements beginning in 2023, according to a new law.
The new rule requires wage transparency not just during job searches but also on the job. All companies in California will be required to give employees with a pay scale for their present employment upon request.
“With pay transparency, the genie is out of the bottle, and there is no going back,” Maggie Hulce, executive vice president and general manager of enterprise at Indeed, said in a statement.
Wage scales have historically been maintained a secret in the private sector, perhaps to prevent lawsuits. However, the practise has long been detrimental to minorities and a source of prejudice. The country’s transparency law aims to lessen racial and gender wage gaps and help women and people of colour compete more successfully for jobs.
People can determine whether they are undervalued by, for instance, comparing their current wage to job advertising with the same job description.
“You’re going to need a lot of different elements in place for men and women to get paid the same for the same amount of work and the same experience,” said Monique Limón, the California state senator who sponsored the new law. “And one of those is transparency around salary ranges.”
“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.” —Limón added.
Since New York City introduced a similar law in November, the percentage of job posts containing employer-provided compensation information has risen.
According to Indeed’s study, job advertisements that contain compensation information generate greater interest from job searchers than those that do not, with 30% more applications hitting the “apply” button.
New York also has a new pay-transparency law passed on December 21 and will go into effect in the 2023 fall.