A new California bill signed on Tuesday will now require employers with over 15 employees to list pay and salary ranges on all job postings.

Signed into law by Gov. Gavin Newsom, Senate Bill 1162 was first introduced by Sen. Monique Limón in February 2022. 

The law will also require employers to provide a pay range when requested. Employers who fail to comply could be fined under the new legislation.

The new law will take effect on Jan. 1, 2023.

“Pay transparency is key to achieving pay equity. SB 1162 will help identify the gender and race-based pay disparities by requiring pay transparency at every stage of the employment process, from hiring, to promotion, and ongoing employment,” said Limón. “We must increase pay transparency in order to close the gender and racial wage gap, which prevents women, particularly women of color, from achieving economic security.”

A similar bill was passed in 2019, SB 973, but that bill only required employers with over 100 employees to submit pay reports to the Department of Fair Employment and Housing. Salary and pay information was not required to be publicly available.

The new law will now put California in line with other states and cities that have enacted similar pay transparency laws including Washington, Maryland, New York City, Ohio (Toledo and Cincinnati only), Colorado, Nevada, Connecticut and Rhode Island 

Proponents of the bill say the lack of pay transparency disproportionately affects both people of color and female employees.

“During our research for the Contract Worker Disparity Project, we found that contract workers (who are disproportionately Black, Indigenous, Latinx, Asian, women, and nonbinary) are more likely to be paid less and have less access to benefits and protections, despite performing similar work to direct employees,” said Catherine Bracy, CEO and co-founder of TechEquity Collaborative. 

According to the U.S. Department of Labor, women in the U.S. currently earn 82 cents for every dollar that a man earns.

“In 2020, women’s annual earnings were 82.3% of men’s, and the gap is even wider for many women of color,” the study says. Across the board, women earned less than men in nearly all occupations with the pandemic stalling any gains made to close the pay gap even further.

“Transparency is key if we want to close the gender and race wage gaps, which still persist in nearly every industry and occupation in this country. Providing salary ranges on job postings empowers women and other workers with information they need to make the best decisions for their families and negotiate for the income they deserve,” said Jessica Ramey Stender, policy director and deputy legal director at Equal Rights Advocates. “California has led the nation on equal pay protections and this bill is the next logical step to continue that progress and keep forging a path for other states to follow.”