California passes law requiring companies to post salary ranges on job listings

California lawmakers on Tuesday passed legislation requiring all employers based or hiring in the state to post salary ranges on all job listings. The law will also require California-based companies with more than 100 employees to show their median gender and racial pay gaps — a first for a U.S. state.

The bill will head to Gov. Gavin Newsom, who has until Sept. 30 to sign or veto it. He hasn’t yet expressed a position and didn’t immediately respond to a request for comment. If he signs it, the law would affect some of the biggest U.S. companies, including Meta Platforms Inc., Alphabet Inc. and Walt Disney Co.

In recent years, more states have adopted an array of transparency laws to fight the stubborn gender and racial pay gaps.

Women who work full time earn about 83% of what men do, according to U.S. Census Bureau data — a figure that hasn’t budged much in recent years. Black women and Latinas earn less, on average, than their white counterparts.

If signed by Newsom, California would join Colorado, New York City and Washington state in adopting the job-posting requirement. Only Colorado’s law is in effect; New York City-based employers will have to list pay ranges starting Nov. 1. The New York state Legislature also passed a similar bill that’s awaiting Gov. Kathy Hochul’s signature.

If the California and New York governors, who are both Democrats, sign the pending laws, almost a quarter of the U.S. population will live in states with such salary disclosure requirements.

“I think this becomes a tipping point, frankly,” said Christine Hendrickson, vice president of strategic initiatives at Syndio, which provides software that helps employers identify pay disparities. “It’s at this point that employers are going to stop going jurisdiction by jurisdiction and start looking for a nationwide strategy.”

The California Chamber of Commerce opposed the bill, even after lawmakers stripped a requirement that would have made all pay data public. New York City’s rule also faced business pushback, which delayed enforcement by six months.

Pay transparency on job postings is just one of many tools cities and states have adopted to close wage gaps. Some also prohibit employers from asking about pay at past jobs and from disciplining workers who share pay information.

Maryland requires pay to be disclosed for job postings upon request and Connecticut, Nevada and Rhode Island require disclosure during the hiring process.