Whether setting pay for a new hire or adjusting compensation for a current employee, employers must navigate a range of legal considerations. In this episode of California Employment News, Weintraub employment attorneys Meagan Bainbridge and Nikki Mahmoudi share key reminders to help employers stay compliant with California’s complex wage and hour laws.

Watch this episode on the Weintraub YouTube channel.



Show Notes:

Meagan:
Hello, everyone. Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment Group at Weintraub To. My name is Meagan Bainbridge, and I'm a shareholder in the Firm's group. Today, I'm joined by my colleague, Nikki Mahmoudi, and we're talking about what are important considerations for employers when deciding what to pay an employee.

In California, deciding an employee's pay requires careful consideration of various factors, including the legal requirements and, of course, business needs and best practices. First, employer should determine their business needs and decide who it is that they need to hire and come up with a job description consistent with those needs. Employer should then review the job description developed for the position and correctly classify the employee as exempt or non-exempt. If you're not sure what that is, in our archives, there's many podcasts and video resources talking about what the difference is between an exempt and a non-exempt employee is. If it is an exempt position, employer should then ensure that the position meets the exempt salary requirements. If non-exempt, then employer should require, at a minimum, that that position meets the state's minimum wage requirements.

Nikki:
Once the pay is determined, employer should ensure that they are complying with California's Pay Transparency Laws, which, among other things, requires the following: Pay Scale Disclosures and job postings. As of January first, 2023, employers with 15 or more employees must include the pay scale, which includes either a salary or an hourly wage range. In all job postings, including remote positions that could be filled with California residents. This information must be included in the job posting itself. You can't just include a link or a QR code that will take them to another page. You must also to provide a pay scale to current employees. Employers are required to provide current employees with a pay scale for any position upon request. Finally, there's a prohibition against salary history inquiries. It's illegal to ask a job applicant about their salary history in determining whether to make an offer to an applicant and what that offer is. Employers may inquire as to a particular applicant's salary expectations. It just can't be linked with the previous pay. Nikki, what else should employers consider when setting an employee's pay?

Meagan:
Let's talk a little bit about fair pay. Under Labor Code Section 1197. 5, which can apply to public and private employers, an employer will not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex, another race, or ethnicity for substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions. Except where the employer demonstrates the wage differential is based upon one or more of the following factors which we're going to talk about, which must be applied reasonably. Different factors that we're going to discuss must account for the entire wage differential. Those include a seniority system, a merit system, a system that measures earnings by quantity or quality of production, a bonafide factor other than sex, race, or ethnicity, such as education, training, or experience. Now,