New Pay Transparency Required by California Starting in 2023


On September 27, 2022, Governor Newsom signed into effect SB 1162, a critical new law requiring employers with 15 or more employees to disclose pay scale data in job postings and provide the pay data to current employees upon request.  The new law will also require employers with more than 100 employees to report “for each combination of race, ethnicity, and sex, the median and mean hourly rate” for a litany of job categories.

According to a recent analysis of pay data required under SB 973, in 2020, women in California lost $46 billion due to the gender pay gap and people of color in California lost $61 billion due to the race pay gap.

This pay transparency will make it significantly more difficult for employers to hide discriminatory pay practices from employees who, many times, are kept in the dark about what their colleagues are earning and have no way of discovering their employer’s discrimination.  As Senator Monique Limón (D-Santa Barbara) who introduced SB 1162 put it:

“Pay transparency is key to achieving pay equity. SB 1162 will help identify the gender and race-based pay disparities by requiring pay transparency at every stage of the employment process, from hiring, to promotion, and ongoing employment.  We must increase pay transparency in order to close the gender and racial wage gap, which prevents women, particularly women of color, from achieving economic security.”