With 2023 underway, there are new California Labor Laws that took effect on January 1st. These laws are primarily geared toward reducing pay inequality among various demographics and securing the privacy of workers’ data.
Here are some laws that employers must take note of this year:
- Minimum Wage Raise to $15.50 (Labor Commissioner’s Office)
The state’s Department of Finance found that the inflation rate had increased by 7.9%, which required an increase in the minimum wage by 3.5%, resulting in the $15.50 per hour rate for 2023. Some cities have implemented minimum wage rates that are higher than the state. The highest local minimum wage is in Emeryville, where employers are required to pay their workers $17.30 per hour. In Los Angeles, the minimum wage will rise to $16.04 an hour in July.
How this affects employers who typically hire high-skilled workers earning beyond the minimum rates may include increasing key wage thresholds for all workers, including raising the minimum salary of exempt “white-collar” workers to $64,480 annually or $1,240 weekly.
- 2023 Pay Transparency Law (Senate Bill No. 1162 – Labor Code section 432.3 (c) amendment)
- (1) An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.
- (2) An employer, upon request, shall provide an employee the pay scale for the position in which the employee is currently employed.
- (3) An employer with 15 or more employees shall include the pay scale for a position in any job posting.
- (4) An employer shall maintain records of a job title and wage rate history for each employee for the duration of the employment plus three years after the end of the employment in order for the Labor Commissioner to determine if there is still a pattern of wage discrepancy. These records shall be open to inspection by the Labor Commissioner.
By providing more transparency around what different roles pay, employers can ensure that they are not undervaluing or overvaluing certain positions. This can help to reduce the potential for pay disparities based on factors such as gender, race, or experience, and can promote more equitable compensation practices across the organization. Addressing the pay scale upfront allows better alignment between the worker and the prospective employer and makes salary negotiations less contentious.
- Expanding Pay Data Reporting (Senate Bill No. 1162)
- This bill requires a private employer that has 100 or more employees to submit a pay data report to the department on or before the second Wednesday of May 2023, and for each year thereafter. The report should include the median and mean hourly rate for each combination of race, ethnicity, and sex within each job category.
- This bill would also require a private employer that has 100 or more employees hired through labor contractors, as defined, to also submit a separate pay data report to the department for those employees in accordance with the above timeframe.
Pay data reports are important because they provide information on the pay practices of an organization, including information on the distribution of wages and salaries across different groups of employees. Additionally, pay data reports can be used by organizations to benchmark their own pay practices against those of similar organizations and to identify areas for improvement.
For employers familiar with the federal EEO-1 report for the Equal Employment Opportunity Commission (EEOC), staying in compliance with this new law may not be too much of a stretch outside of providing the mean and median pay rates for key demographics. Partnering with the right contract labor firm can also ease the reporting collection needed for contingent workers’ wage data.
- California Privacy Rights Act (CCPA)
Starting January 1, 2023, qualifying companies that employ California residents to need to meet the required steps to comply with the California Privacy Rights Act (CPRA), which amends the California Consumer Privacy Act (CCPA) by expanding its protections to employees, job applicants, and independent contractors.
Employers who are mandated to participate in this new law include those who…
- have at least $25 million of annual gross revenue.
- buy, sell, share or receive the personal information or data of 100,000 or more California residents.
- receive over half of the revenue from the sale of personal data of California residents.
To stay in compliance, these employers must…
- Identify the personal information collected from employees, applicants, and contractors.
- Provide notification of information being collected upfront.
- Allow the ability to opt out of data collection unless necessary for business purposes.
Although it is uncertain how much these new regulations will affect companies in 2023, it is palpable that they must start preparing now to adhere to the new standards.
As an Engineering Staffing agency that services a wide range of customers, SoloPoint Solutions has taken steps to understand and comply with these new labor laws. We are happy to help guide our clients and ensure that they are in compliance. For more information about our services, contact us today: