Building on 2021 legislation that created pay reporting requirements aimed at reducing pay gaps based on sex, race and ethnicity, California has approved new legislation — the Pay Transparency Act — with additional disclosure, recording and reporting requirements, including disclosure of pay scales to employees and in job postings.
The act, effective January 1, 2023, provides for the following:
In light of the size and influence of California’s economy, the act is bound to make a significant impression on policy makers and businesses across the US. The states of Colorado and Washington as well as New York City have recently enacted similar pay disclosure laws, but with an economy comparable in size to that of Germany, California’s new requirements will likely have a farther reach. Employers should prepare for the new pay disclosure, recording and reporting requirements imposed by the act.