California passes law requiring companies to post salary ranges on job listings
bloomberg.com
bloomberg.com
The bill will head to Governor Gavin Newsom, who has until Sept. 30 to sign or veto. He hasn’t yet expressed a position and didn’t immediately respond to a request for comment. If he signs it, [etc.]
Is there anyway to report companies / job listings that are not in compliance?
Ranges can be non-compliant. A range like that sure is non-compliant. I don't know if it is technically, but surely it is in the spirit of the law.
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
> “Pay scale” means the salary or hourly wage range that the employer reasonably expects to pay for the position.
Also, apparently you can already ask for the pay scale, but this law would require it to be on any job posting.
> Existing law requires an employer, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment.
And you would be able to get the pay range for your current job.
> This bill would also require an employer, upon request, to provide to an employee the pay scale for the position in which the employee is currently employed.
And companies will still avoid listing a salary, and just say 'Not accepting applicants in Colorado or California' as they do now[1] to get around the Colorado law.
Not to mention, many jobs sites are probably based there, are they going to look too kindly on job listings that disallow their own state?
Many Washington state employees salary info is public, including full name:
So folks who do not know any better could still work for 1/4 the market rate.
They may not address price transparency for people who receive equity compensation, but it is still a great start to help those at the bottom.
But alas making it mandatory is not the way to go.
This implies some do. So it didn't answer the question.
Easily searchable and sortable price transparency will help allocate labor resources in a more timely manner.
I'm not saying that some transparency wouldn't help, just that market pricing for labor doesn't work the same way it does for a commodity.
Personally, I do not see a reason to legislate a specific bottom or top range. Let the pay range be $min wage to $1B. Eventually, employers who try to do that will be forced to change by lack of quality workers applying to them.
Agreed. (and/or we end up with finer graduated positions with similar pay bands).
> Personally, I do not see a reason to legislate a specific bottom or top range. Let the pay range be $min wage to $1B.
If you don't require any good faith description of the pay bands, the law is useless. You can post accurate, narrow pay bands now if you want. Or you can post none. Workers have been letting companies get away with posting none.
$min wage to $1B is functionally equivalent to none.
And there is nothing preventing employers from updating their price ranges.
Of course employers do not want to show their current employers that they are increasing their price for new hires, so that is their real concern with publicly listed price ranges.
See the proposed amendments to 432.3 (m) (1).
These laws don't outlaw negotiation. Not sure what you're talking about there.
All the way at the bottom of:
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
>(1) “Pay scale” means the salary or hourly wage range that the employer reasonably expects to pay for the position.
From the article...
Post huge ranges and tell very qualified people that they only qualify for the low end, for instance.
Will this expose that, or do you think that companies will find a way around that?
Regardless, I think the biggest benefit to companies hiring H1Bs is the leverage of the employee’s citizenship status.
I expect this would depend on H1B visa counts at least be public information. I'm not sure that's the case, and I'm not sure if it should be.
How much is a visa worth to you? A lot, so yes they'll pay people less; that's the way it works.
H1B income is capped by the inability to have secondary income sources and the inability for spouses to work.
Also, what does it do about the situation when a job's compensation is largely not salary but stock?
If we want to resolve pay disparities we also need to stop pretending that Salary means 40 hours and instead require accurate hours worked reporting regardless of "exempt" salary or not.
Why? Because hours worked is not equal across the variables
Take Netflix for example who famously only had a single “Software Engineer” role regardless of skill level.
You’d see something like $75K-$1M which is not super helpful.
For others, they will know that the bottom of the pay range for software engineers is $75k so if they want to earn that much, they should acquire those skills.
For those who aspire to the low end that’s fine but there’s still no guarantee you’d get an offer.
Though I support this move whole heartedly it still doesn’t change the fact that you have to interview and get an offer to know the particulars.
The impossible ideal would be a company preemptively giving you an offer before interviewing given predetermined interview performance. That way you can only interview at places that will pay you want, guaranteed. This is basically the same as applying to places with a very tight range.
Otherwise they can apply with Apple, Alphabet, Microsoft, and Facebook who might be hiring within a narrower, but higher pay band.
So... what's the point of the law? Isn't this already the case?
The benefit of the law would be to give all market participants access to more information, but it is also important not to unnecessarily restrict any of the market participants.
It will be obvious that if a labor buyer is putting out $min wage to $1B pay ranges, that they should be ignored and/or they will get the worst applicants. For a labor seller, they will know to avoid labor buyers that cannot provide a decent bottom pay for their job listing.
- what the prospective employee is currently paid - what the prospective employee would move job for - how serious the alternatives the prospective employee mentions are
Those three are the things the prospective employee knows, that the prospective employer is trying to guess. This new law erodes (and will likely eradicate) the first one, as it's basically a statewide public salary banding system.
Also, this probably isn't all just "labor" jobs. I think it's all jobs.
It should never be relevant to an employer what a candidate is currently being paid.
>Also, this probably isn't all just "labor" jobs. I think it's all jobs.
I do not understand this. All jobs involve a worker selling labor to someone else.
Well they aren't going to come and work for you unless you pay them more than what they're currently being paid (unless they're moving for something like life reasons) so I don't think there is any more relevant number than that.
Of course it's relevant - it helps them understand what can tempt an employee away from their current job. That's why it's worth hiding it. This law stops it being hidden.
Wait this doesn't make sense.
If you think that employers would get better applicants if they put more accurate ranges... then they'd be putting accurate ranges right now, as nothing's stopping them.
Why does the government need to step if it's it's obviously such a good deal for the employers right now?
And why would I ignore a company with a wide range? I don't care if the range is wide, as long as I get the upper end of it.
Because employers have had disproportionate power over labor for a very long time. Might not be so much for engineers/doctors/lawyers/etc, but 80%+ of people are walking into a negotiation in a weaker spot with less info than the employer.
That is why in the past couple years, we are finally seeing signs outside Taco Bell and signs on bus driving advertising pay rates. Until now, they have enjoyed a better negotiating position than the employees.
> And why would I ignore a company with a wide range? I don't care if the range is wide, as long as I get the upper end of it.
Because if I am capable of getting the upper end, and another employer is offering the upper end, but with a higher lower end also, I am not going to waste my time risking getting a lower offer. Applying to a job and interviewing have costs.
You think it's an advantage to companies to post more accurate pay bands - right? You said "It will be obvious that if a labor buyer is putting out $min wage to $1B pay ranges, that they should be ignored and/or they will get the worst applicants."
But they can post narrow bands right now if they want to - they don't need to wait for the law to tell them do it.
If it's an advantage to them, then why aren't they doing it anyway?
I would guess that the answer is it's not an advantage, because most of the time their pay is bad, and telling people up front does not help them. I've seen this with companies like ThoughtBot and GitLab that make a big deal out of pay transparency... problem is they're being transparent about how bad their pay is.
Because it does not sufficiently offset the advantage they get from withholding pay information from labor sellers.
As soon as it does help employers more than it hurts them, they do advertise pay. Now that labor supply has shifted so drastically that restaurants and retailers have to close early, those places are advertising pay.
The purpose of the legislation is not to help employers, it is to help employees, who are at a disadvantage due to lack of information among other things.
> I've seen this with companies like ThoughtBot and GitLab that make a big deal out of pay transparency... problem is they're being transparent about how bad their pay is.
Their pay is bad to you. Maybe it is acceptable to someone else. Maybe someone is earning $20 as a bus driver and wants to switch jobs. Maybe they would be willing to work for ThoughtBot and Gitlab’s wages and work to become qualified.
Or maybe their pay is objectively too low and they will eventually go out of business. Either way, price transparency always leads to better resource allocation and better functioning marketplaces. Letting either buyers or sellers have long term disproportionate advantages is not in society’s best interest.
This price transparency law will give applicants the ability to see if Netflix is bluffing when they say they offer top pay, without having to waste time actually applying.
You have to post the pay scale for the position. So, if current employees in that role make $100,000 to $120,000, and you expect to hire whomever responds at ~$116,000, you would post $100k-120k.
Later, if you hire someone for $125k, the pay scale now includes $125k. You must provide this info to current employees on request, and would have to include it in subsequent listings.
I can't imagine all the interpersonal issues caused by this being requested after every hire!
I mean, the lack of transparency and partial information makes the situation unstable. Employers enjoy an information advantage. Times that this information advantage are breached --- whether by people selectively sharing information, leaks, etc --- cause big disruptions to morale and big movements of people.
Partial information is known to distort markets and cause wide variability in outcomes (and to create less stable equilibria than markets with better information flow).
This law will remove an aspect of the employee's secret information - what they're currently on - so their next employer will be able to calculate precisely how little to offer them.
Employees absolutely do not have the information that there are people in the same role earning 5x what they do. When they find out, it tends to get really messy, too.
> Each side has different information, but not asymmetric.
This is a definition of asymmetry that I am not familiar with.
> This law will remove an aspect of the employee's secret information - what they're currently on
Actually, the law explicitly prohibits employers seeking this information about employees-- their specific comp. In the past, employers would pay data brokers for this information.
In turn, the playing field was very tilted: you could see the person's current comp and know the entire set of comp you pay in that position and the total history of offers you've made and their acceptance rates... whereas employees know just what they've gathered through informal, unreliable means (glassdoor, friends, etc).
No, you'll be able to see that now by looking up their current employers pay bands for their role. Previously this wouldn't have been available, except anecdotally on Glassdoor.
Actually, no, this is completely wrong.
Previously you'd use services like QuickConfirm, etc, and get that person's exact comp. Employers and payroll processors colluded to share this information. The law now prohibits doing that.
And you may not even be able to look up the pay band, because only people in that role are allowed to request it from the employer. It's only if you can find a corresponding job listing that you can get the entire band as of that date.
As a result, the information asymmetry is adjusted from favoring employers to be more neutral; employers only have very approximate information on an employee's past comp; comparable to employees' knowledge of the compensation for the role into which they're applying.
In many companies, org charts are public, but comp bands are secret, so this can be done without messing up manager/IC relationships.
Is this the more depriving by state governments of the common workers’ privacy through needless encroaching laws?
Who gains by this loss of privacy?
Proof?
> Makes me wonder why California and New York are exposing the privacy part for through their state victims’ paychecks?
What on earth are you talking about? How does posting a salary range "expose the privacy" of people? Also this isn't just about pay equity, it's about knowing what you are applying for before going through the process.
> Meanwhile West Virginia, Michigan, Colorado, and Utah all achieved gender-pay equality as well as privacy without any pay transparency.
Also, how do you know that gender-pay equality has been achieved?