California Governor Newsom recently signed off on significant changes to California’s Pay Transparency requirements. Under California Senate Bill 642 – which was approved on October 8 and takes effect January 1 – Golden State employers will have to be more specific about the pay ranges they provide in job postings. The update also extends the time workers can bring claims for violations of California’s Equal Pay Act. What do employers need to know?

Revised Definition of “Pay Scale”

Current law requires that employers provide the pay scale for a position:

• To an applicant applying for employment;
• To an employee for their current position; and
• For employers with 15 or more employees, in a job posting for any position.

“Pay Scale” is now defined as a “good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.” The prior definition left open the question of whether the pay range provided in job postings should include the full potential range. This change appears to clarify that the pay range to be provided to applicants and in job postings should reflect what employers expect to pay the candidate selected for the particular position, rather than a broader overall potential range.

Definitions of Wages, Wage Rates, and Sex

SB 642 defines the “wages” and “wage rates” for purposes of California Equal Pay Act claims to cover all forms of pay. That includes, but is not limited to: salary, overtime pay, bonuses,...

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