Legislation passed by California lawmakers on Aug. 31 would require employers in the state with 15 or more employees to disclose their hourly pay or salary range for all job postings.
Governor Gavin Newsom has until Sept. 30 to approve or veto the bill, S.B. 1161, which passed by a 43-15 vote. If passed, California would become the first state in the nation to require companies with more than 100 employees to disclose their median hourly pay for race, ethnicity, and gender within each job category.
The bill also would require employers, upon request, “to provide to an employee the pay scale for the position in which the employee is currently employed,” according to the legislation.
California-based companies hiring outside the state wouldn’t be required to include pay ranges on job listings, while companies based out-of-state and hiring for jobs to be performed in California will be required to disclose pay ranges. Critics of the bill say it doesn’t matter, because large companies typically standardize their hiring practices anyway. The California Chamber of Congress stated that the bill “imposes administrative and recordkeeping requirements that are impossible to implement.”
Employers would be required to maintain records of a job title and wage rate history for each employee for a specified timeframe, open to inspection by the Labor Commissioner.
Additionally, the Labor Commissioner would be authorized “to investigate complaints alleging violations of these requirements” and “order an employer to pay a civil penalty upon finding an employer has violated these provisions,” the bill states.
If Governor Gavin signs S.B. 1161 in law, California would join many other cities and states nationwide that require companies to be more transparent about their pay and hiring practices. Colorado, Washington, New York City, and New York State are among those that have enacted similar pay transparency laws requiring disclosure of salary in job postings. Other states—such as Connecticut, Nevada, and Rhode Island—require employers to disclose salary ranges to candidates during the hiring process, as opposed to in job listings. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.