On January 1, 2023, California's new pay transparency law requiring pay scales in job openings will go into effect. Although Senate Bill 1162 was passed in September, many employers were left to wonder how the California Labor Commissioner would interpret a few key elements of the law. As previously discussed, Senate Bill 1162 instituted major changes to the Annual Pay Data Report and requires employers with 15 or more employees to post a pay scale in any open job advertisement. Although the Civil Rights Department has not yet issued guidance on the new Annual Pay Data requirements, the Labor Commissioner's Office has updated its Frequently Asked Questions on a few key elements of this law, discussed below:
15-Employee Threshold. Newly revised Labor Code section 432.3 applies to employers with 15 or more employees. The statute does not specify how to count the employees for purposes of coverage, but the Labor Commissioner has issued guidance stating that the calculation of the 15-employee threshold is to be consistent with how an employer counts employees for the purposes of 2022 COVID-19 Supplemental Paid Sick Leave (SPSL) and phase-in for the new minimum wage rates. For purposes of calculating whether the new 2023 minimum wage applies,1 an employer is covered if it has 26 or more employees. The guidance issued on that topic states: “The Labor Commissioner recommends that if an employer reaches the threshold of 26 employees at any point in a pay period they compensate...
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