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A new law that went into effect this week requires most California employers to disclose salary on job listings.
The law affects every company with more than 15 employees looking to fill a job that can be sourced from the state of California. It covers hourly and temporary work, up to openings for highly paid technology executives.
This means that it is now possible to know how much top tech companies pay their employees. For example:
Notably, these salary lists do not include any bonuses or equity grants, which many tech companies use to attract and retain employees.
California is the latest and largest of states and cities that have enacted payment transparency laws, which include Colorado and New York City. But more than 20% of Fortune 500 companies are based in California, including leaders in technology and media, and advocates hope the new California law will be the tipping point that turns salary disclosure into standard practice.
In the US, there are now 13 cities and states requiring employers to share salary information, which covers nearly 1 in 4 workers. according to pay scaleA software firm focusing on salary comparison.
California’s pay transparency law aims to reduce the gender and race pay gap and help minorities and women better compete in the labor market. For example, people can compare their current salary to a job listing with the same job title and see if they are being paid less.
Women earn approximately 83 cents for every dollar earned by a man. according to the US Census,
“You’re going to need a lot of different elements to get men and women to get equal pay for equal work and equal experience,” said California state senator Monique Limon, who sponsored the new legislation. , “And one of them is transparency around salary ranges.”
But new disclosures under the law may not tell the whole story of what the job pays. Companies may choose to display detailed pay ranges, violating the spirit of the law, and the law does not require companies to disclose bonuses or equity compensation.
The California Chamber of Commerce opposed the bill, saying last year that the law could also penalize ambitious workers who are demanding more money because of their experience or skills. Some employers may be wary of posting salaries to prevent bidding wars for top talent.
In a comment to CNBC, a META spokesperson said, “To ensure fairness and eliminate bias in our compensation systems, we regularly conduct pay equity analyses, and our latest analysis confirms that we are among the global leader in pay equity analysis.” Continued pay equity based on gender across level and race.U.S. The firm also noted that it typically pays full-time employees in equity as well as cash for people with similar jobs.
Apple and Google did not immediately respond to requests for comment.
new law
California has two primary components Senate Bill No. 1162Which was passed in September and came into effect from January 1.
First is the salary transparency component on the job listing, which applies to any company with more than 15 employees if the job can be performed in California.
The second part requires that companies with more than 100 employees submit salary data reports to the state of California with detailed salary information by race, gender and job category. Companies are required to provide a similar report at the federal level, but California now requires more detail.
Employers are required to maintain detailed records of each job title and its salary history, and California’s labor commissioner can inspect those records. California can enforce the law through fines and investigate violations. The report will not be published publicly under the new law.
Limon said the bill helps narrow the pay gap by giving people information so they can better negotiate their salaries or determine whether they are being paid less for their experience and skills. It will also help the state ensure that companies are following existing equal pay laws.
“The reason it’s important is that we haven’t been able to solve problems we can’t see,” she said.
Limon said he also hopes the requirement will help California companies recruit the best talent and compete against other states where employers are not required to pay salaries.
Pay transparency laws may also prompt companies to raise salaries as they see that rivals are offering higher salaries. Some companies may also choose to post salary ranges on job listings where it is not required.
Ultimately, she said, helping to ensure that women and people of color are being paid equally will help California’s economy.
“The consequences are not just for one person, there are economic consequences for the state for underpaying people,” Limon said. “It means that their earning power and how they’re able to contribute to this economy in California, whether it’s through the sales market, the housing market, investments, is limited because they’re not being paid equally.” Is.”
Drawbacks
The new law does not require employers to post total compensation, which means companies may omit information about stock grants and bonuses, presenting an incomplete picture for some highly paid jobs.
For high-paying jobs in the technology industry, equity compensation in the form of restricted stock units can make up a large percentage of the employee’s take-home pay. In industries such as finance, bonuses are a large part of annual salary.
“Especially for technical employees, ultimately people want to know how much they are getting in total compensation,” said co-founder Zuhair Moosa level ka.fyi, a firm focused on recruiting and coaching for technology workers, that crowdsources compensation. “Sometimes stock compensation can exceed 50% of your actual total comp.”
Moses said that the stock of big tech companies is basically liquid because it can be sold quickly on the stock market.
The new law also allows companies to offer a wider range for salaries, sometimes with a range of $100,000 or more between the minimum salary and the highest salary for a position. This seemingly violates the spirit of the law, but companies say the limits are realistic because base pay can vary widely based on skills, qualifications, experience and location.
Companies may be open to hiring candidates with a range of experience — from entry-level to a more senior individual — for a particular opening, said Lulu Sikli, senior corporate attorney at Payscale.
Seikaly said she advises clients to post job listings with a specific seniority level to narrow down the potential salary range.
“When we talk to clients, and they ask what do you think is a goodwill threshold, we tell them it’s a business decision, but the way we’ll do it, especially from the legal side. “If you post by levels, it’s going to cover you a lot more than posting a wide range,” Sickley said.
Some California companies aren’t explicitly listing salaries for jobs they do in other states, but advocates hope California’s new law could lead to more salary disclosure nationwide. After all, a job listing with a clear starting salary or range is likely to attract more candidates than one with an unclear salary.
“I was saying to some people this morning that payment transparency is an exception right now,” Sikley said. “Give it five to 10 years, I think it will become the norm.”
