California’s pay transparency law took effect just over three years ago. It required employers with at least 15 employees to include hourly wage or salary pay scales (ranges) for all external and internal job postings.
This gives applicants and current employees important information on what a job pays, so that they can more effectively negotiate and ensure that they’re paid fairly. It can also help new employees avoid getting a lower starting rate than their colleagues simply because they were earning a low pay rate at their previous job.
The law also requires larger employers (those with at least 100 employees) to report pay data to the state based on employee race, gender and ethnicity. The law prohibits employers from paying employees less than those of a different race, gender or ethnicity for doing basically the same work.
Changes to definitions and statutes of limitations
The law was recently amended to broaden some definitions, clarify categories of illegal pay practices and increase the statute of limitations for those bringing a legal action. Specifically, the changes, which took effect at the beginning of this year, include the following:
- “Pay scale” now means “an estimate of this expected wage range that an employer reasonably expects to pay for the position upon hire and is made in good faith.” Adjustments in other terms, including “wage” and “sex,” have also been made.
- The statute of limitations for bringing a civil action against an employer for violating the law has been increased from two years in most cases to three years “after the cause of action occurred.”
Further, those who bring a civil legal action against an employer are “entitled to obtain relief for the entire period of time in which a violation of its provisions exists, but not to exceed six years.”
Wage and hour laws can be confusing for many employers – and certainly for employees. That doesn’t justify acting unlawfully. Those who believe they’ve been a victim of an employer that didn’t comply with the law are wise to get legal guidance to review the matter and their options.