What does the law do?

Companies in California were already required to provide pay scale information for job candidates upon request, but after the new law takes effect on Jan. 1, 2023, companies with 15 or more employees will have to do so for all postings, both internal and external.

The law applies to roughly 200,000 companies, which employ about 19 million workers, the vast majority of California’s labor force.

Companies with 100 or more employees will also be required to report detailed pay information to California’s Department of Fair Employment and Housing annually. Updated pay data reports will be due starting May 10, 2023. Companies could face fines of $100 per employee for failing to comply.

California is home to scores of corporate giants, including Google, Meta, Oracle, Apple, Uber and Lyft.

Peter Bamberger, scholar with the Academy of Management and a professor in the Coller School of Management at Tel Aviv University, said that the law represents “the strongest legislative effort for pay transparency in the U.S. to date.”

“For employees, this legislation takes a good part of the guessing game out of pay negotiations and levels the playing field in such negotiations,” Bamberger said, noting that it is similar to the type of pay transparency regulations seen in much of the European Union.