California mandates greater pay transparency from employers

California foodservice operations that employ at least 15 people will, starting next year, be required to include a pay range in advertisements for open jobs and, upon request, to provide new hires with a gauge of what they can expect to earn, the result of a bill signed into law Tuesday by Gov. Gavin Newsom.

The measure also forbids employers in the state from asking job applicants about what they were paid in the past or hiring someone because of their pay history.

A third component of the law increases the employment data that employers of at least 100 people will be required to collect and submit to the state for analysis. The mandated information includes a breakdown of a company’s workforce by gender, ethnicity and race, as well as the median and average pay for each category by job.

For operations with multiple locations, the data will be required for each site.

The state says the information, an expansion of what was required under a 2020 law, will facilitate its effort to spot gaps in pay by gender, race or ethnicity.

It takes effect May 2023.

In signing the bill, SB 1162, Newsom hailed the measure as a step toward equalizing the pay of all individuals performing the same job, and to bring parity between men and women in particular.

“California has the strongest equal pay laws in the nation, but we’re not letting up on our work to ensure all women in our state are paid their due and treated equally in all spheres of life,” Newsom said in a statement. “These measures bring new transparency to tackle pay gaps.”

The new law is the latest example of efforts by states to provide job candidates and new hires with a sharper sense of how their pay stacks up with the wages of individuals in a comparable position. At least a dozen states have taken steps to promote that transparency.