Workers in California, ask about your pay scale!

Tell me if you've heard this one before: You're having the annual review conversation with your boss. Your boss reviews your accomplishments and congratulates you. You've done really well! You have a bright future ahead at Company. Keep going! Then you get to the compensation part of the conversation. Company rewards hard work and your boss would love to give you more of a raise but alas, you are near the top of your band and they just can't do that. It doesn't leave much room for discussion, never mind negotiation.

But, is that true? Are you near the top of the salary band for your current role? How could you possibly know? In the past (and in most US states, in the present) you couldn't possibly know. But now, if you live in California, you can find out! Since January 1, 2023, employers must provide employees in California with their pay scale upon request.

Pay transparency is not just for job listings #

Check out FAQ number 28 about the California Equal Pay Act:

28. Is an employer required to provide the pay scale to an employee for their current position?
Upon request, an employer shall provide an employee with the pay scale for their current position.

Most of the conversation about pay transparency focus on the salary range in job listings. It makes sense. That's where the traditional information asymmetry between workers and bosses has the highest stakes. Instead of being able to ask you about your salary history and refusing to tell you the salary range, employers in California (and several other states) must now disclose the salary range and can't ask you about your salary history. Let me tell you, as a person who was severely underpaid for the first oh, 12 years of my career, being able to start the conversation without that baggage was a huge fairness reset.

You usually have less leverage to negotiate salary once you're at a company. One of the reasons you have less leverage is that the employer already knows you're willing to do your job at your current salary, so they are unlikely to offer you a substantial increase. They might suspect that if they underpay you too much you'll go elsewhere, but you'd have to know you're being underpaid. At the same time, you don't know how much they might be willing to pay for the work. Where does your salary fall in the range? Has it changed since you were hired?

Some employers in states that require putting salaries on job listings weasel out of the requirement by giving really huge ranges, stuff like "50,000 to 300,000 a year, depending on experience and location." These laws are pretty new so it's not clear how that will go for them if they get sued about it.

FAQ number 31 about the California Equal Pay Act says:

31. How is "pay scale" defined?
Section 432.3, as amended, defines "pay scale" to mean the salary or hourly wage range the employer reasonably expects to pay for a position. An employer who intends to pay a set hourly amount or a set piece rate amount, and not a pay range, may provide that set hourly rate or set piece rate.

When I see "reasonably expects to pay for a position" I think those huge bands are not in the spirit of the law. But, you know, we won't really know until someone fights about it.

However, in the meantime, employers are in a little bit of a double bind. If they say the salary is (to keep using my silly example) "50,000 to 300,000 a year" on the job listing, it makes it harder for them to also use "but you're at the top of the band" as a negotiation tactic with current employees who are not at 300,000 a year. So, I think that by having both requirements, to disclose salary on listings and to current employees, it incentives honesty about salary ranges^[1] simply out of self-serving necessity.

Knowledge changes the balance of power #

California employers don't have to volunteer to tell current employees their pay scale. And many California^[2] workers, I suspect, still don't realize they have a right to an answer. When more workers know their right and make use of it, the labor market has a shot at becoming a bit more fair.

Addendum #

It has come to my attention that the obvious (to me) pun in the header image is not obvious, especially on a small screen. Like I said in the alt text, it's a photo of three gulls standing on top of mussel-encrusted rocks on a beach partly shrouded in fog. Mussels are similar to, and thus allude to, clams, which is a slang term for money. The three seagulls in a sense stand on a pile of metaphorical money, all while shrouded in a fog of unknowing. Not only that, the seagulls are each at a different height, alluding to pay bands. Also, obviously, birds are cool.