Salary Transparency Requirements - new for 2023
Updated: Jan 27
A new year and new requirements for those of us working in California. I’ll touch briefly here on some of the changes but specifically would like to call attention to how changes in salary transparency will impact small firms. There are other changes not covered here, such as a new bereavement leave requirement, which may trigger changes to Handbooks and will require a few decisions to be made about your firm’s benefits with regards to shaping a policy that meets your obligations as an employer. Also, on December 15th, Cal OSHA voted that COVID non-emergency regulations would be put in place for until December of 2024 which may trigger a few potential changes to your COVID Prevention Plan (CPP), but it means that your CPP will not be going away any time soon. Cal OSHA indicates that a model program is forthcoming, if you need to write or update your CPP.
The hot topic of salary transparency - many have been emailing and asking about the requirements for employers for job postings. But the changes here are several and deserve explanation. The goal is to increase pay equity through transparency, and I hope this will mean very positive changes and shining a light on the firms where we have been working on pay equity for a long time. All employers will be required to respond to any employee’s request for a salary range for the position the employee currently holds or to any person or employee responding to a job opening. Also, employers with more than 15 employees will be required to post a salary range for any job posting. We have seen this push in other states, and I figured it wouldn’t be long before California caught up. What this means is that in near future all employers will likely be posting salary ranges with job postings, regardless of firm size, in order to stay competitive.
A reminder that in an interview we are not to ask for pay history which has been found to contribute to inequity in pay for women and people of color. We can ask for the salary range the interviewee hopes to make in the position. However, with many employers posting the range to begin with, this question may be moot or need to be fine-tuned to gage the candidate’s acceptance of the posted range.
Another part of the salary transparency push is that all employers will be required to keep a record of pay changes and promotions for the duration of a person’s employment and for 3 years after a departure. Many payroll companies are tracking this data, but be sure to verify that you know where it is kept and how you can download the data. Also, payroll companies usually track monetary changes but not changes in title and role. If I haven’t created a salary history worksheet for your firm, now may be the time to create one. This should include all staff and have notes about title changes and be organized by role so you can track the current pay scales based on position. A salary history worksheet is very handy and simple to use to track percentages of increases, years of experience, scheduling changes, and other notes.
Also relative to salary changes, the minimum salary for California exempt employees in 2023 is increasing dramatically for ALL employers to $64,480. Small employers previously had a lower minimum but the carve out for smaller firms has ended. You have likely felt the push already to increase salaries dramatically in the past two years, but double check that you don’t have a salaries staff member earning less than $64,480 (round up to $64,500 to be extra safe). Bonuses may be included in your calculation.
January and February, I’ll be setting aside time to make changes to Handbooks for existing clients and to create salary history tracking worksheets where they haven’t been created already. I see these changes as propelling us forward, requiring work now but towards the equity we all hope to achieve.