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A new law that took effect this week requires most California employers to disclose salaries on job listings.
The law affects any company with more than 15 employees seeking to fill a job that can be performed by the state of California. This includes hourly and temporary work to openings for high-paying technology executives.
This means that it is now possible to know the salaries that the top tech companies pay their employees. For example:
Note that these salary lists do not include any bonuses or equity grants that many tech companies use to attract and retain employees.
California is the latest and largest of states and cities to pass payment transparency laws, including Colorado and New York. But more than 20% of Fortune 500 companies are based in California, including leaders in technology and media, and advocates hope California’s new law will be a tipping point in making payroll disclosure a standard practice.
According to Payscale, a software firm that focuses on salary comparisons, there are currently 13 U.S. cities and states that require employers to share salary information, covering about 1 in 4 workers.
California’s wage transparency law aims to reduce gender and racial pay gaps and help minorities and women better compete in the labor market. For example, people may compare their current salary to job postings with the same job title and find that they are underpaid.
According to the US Census, women earn about 83 cents for every dollar men earn.
“For men and women to be paid the same for the same amount of work and the same experience, you’re going to need a lot of different elements,” said California state Sen. Monique Limon, who sponsored the new law. . “And one of those things is transparency around salary ranges.”
But new disclosures under the law may not tell the whole story about what a job pays. Companies can choose to display wide salary ranges, violating the spirit of the law, and the law does not require companies to disclose bonuses or equity compensation.
The law could also penalize ambitious workers who try to earn more because of their experience or skills, when the California Chamber of Commerce opposed the bill last year. Some employers may be reluctant to post salaries to avoid bidding wars for top talent.
A Meta spokesperson told CNBC, “We regularly conduct pay equity reviews to ensure fairness and eliminate bias in our compensation systems, and our latest review confirms that we continue to have gender and racial pay equity globally. for the people.” The firm also noted that it generally pays full-time employees in cash as well as equity.
Apple and Google did not immediately respond to requests for comment.
California Senate Bill 1162, passed in September and taking effect on January 1, has two main components.
The first is a pay transparency component in job listings that apply to any company with more than 15 employees if the work can be done in California.
The second part requires companies with more than 100 employees to submit salary information to the state of California with detailed salary information by race, gender and job category. Companies must file a similar report at the federal level, but California now requires more detailed information.
Employers are required to keep detailed records of each job and its payroll history, and the California labor commissioner can inspect these records. California can enforce the law through fines and investigate violations. Under the new law, the reports will not be made public.
Lemon said the bill helps narrow pay gaps by giving people information so they can better negotiate their pay or determine if they’re being underpaid based on their experience and skills. It will also help the state ensure that companies comply with existing equal pay laws.
“The reason it’s important is because we can’t fix problems we can’t see,” he said.
Lemon said he also hopes the requirement will help California companies hire top talent and compete with other states that don’t require employers to pay salaries.
Pay transparency laws can prompt companies to raise wages after seeing competitors offer higher wages. Some companies may even choose to post salary ranges on job listings where they are not required.
Ultimately, he said, he would help California’s economy by ensuring that women and people of color receive equal pay.
“The bottom line is there are economic consequences not only for the individual, but for the state for people who are underpaid,” Lemon said. “That means their earning power and how they can contribute to this economy in California, whether it’s the sales market, the housing market, or investing, is limited because they’re not being paid fairly.”
The new law does not require employers to post total compensation, meaning companies can leave out information on stock grants and bonuses, offering an incomplete picture for some high-paying jobs.
For high-paying jobs in the technology industry, equity compensation in the form of restricted stock units can make up a large portion of an employee’s take-home pay. In fields such as finance, bonuses make up a large portion of the annual salary.
“Especially for tech workers, ultimately people want to know how much they’re going to get in total compensation,” said Zuhayeer Musa, co-founder of Levels.fyi, a tech recruiting and training firm. “Sometimes fund compensation can be more than 50% of your actual total compensation.”
Musa said the stocks of big tech companies are mostly liquid because they can be traded immediately on the stock market.
The new law also allows companies to offer a wide pay range, sometimes $100,000 or more, between the lowest salary and the highest salary for a position. That appears to violate the spirit of the law, but companies say the ranges are realistic because base pay can vary widely based on skills, qualifications, experience and location.
Lulu Seikaly, senior corporate attorney at Payscale, said companies may be open to hiring candidates with a variety of experience, from entry-level to more senior, for a particular opening.
Seikaly said she advises clients to submit job listings with a certain amount of experience to narrow down the potential salary range.
“When we talk to customers and they ask what do you think is a fair range, we tell them it’s a business decision, but how do we do it, especially from a legal perspective, if you post by tiers, it’s much more inclusive than putting you in a wide range.” will do,” said Seikaly.
Some California companies don’t disclose salaries for jobs they’re supposed to do in other states, but advocates hope California’s new law could lead to more salary disclosures nationwide. After all, a job listing with a clear starting salary or range may attract more candidates than one with an uncertain salary.
“I was telling some people this morning that payment transparency is kind of the exception,” Seikaly said. “Give it five to 10 years, I think that will become the norm.”