On September 27, 2022, California Gov. Gavin Newsom signed Senate Bill 1162, a broad pay transparency bill requiring employers to include pay ranges in all job advertisements effective January 1, 2023. It also requires employers to report mean and median pay data to “better identify gender and race-based pay disparities.”
In addition to California, other states and cities have enacted similar laws including: Washington (effective January 1, 2023), New York City (effective November 1, 2022), and Rhode Island (effective January 1, 2023). Other states already have wage transparency laws that have gone into effect: Colorado, Connecticut, Maryland, Nevada, New Jersey, and Ohio. Note, these wage transparency laws are not uniform across all jurisdictions. Some also require mention of benefits available and other variants.
Beyond labor and employment law, the new wage transparency laws will also impact the recruitment process required by the Department of Labor’s PERM program (aka permanent labor certification), which is required by U.S. employers in the complex process to petition prospective and current employees for lawful permanent resident (LPR) status (aka green card). To obtain a PERM labor certification for foreign-national employee, the employer must test the local job market by following comprehensive recruitment process dictated by federal regulations (including state job order, newspaper ad, online ads, etc.). Federal law governing this program require wage ranges to be listed on the internal posting at the employer’s worksite.
Since PERM is a federal program, the Department of Labor has not, and likely will not, address wage ranges under state laws in the PERM program. However, employers must look to consistency when recruiting in general, as well as for a PERM. As noted in the recent Facebook settlement, PERM recruitment should be consistent with standard recruitment processes used by an employer.[1] Thus, all PERM recruitment steps should mirror standard recruitment with listings of wage ranges.
PERM regulations require that the employer, in its recruitment, meet or exceed the prevailing wage for the position, as determined by the DOL. Thus, the wage range on the Employer’s recruitment ads must meet or exceed the prevailing wage – which might conflict with wages posted in other, standard recruitment.
Accordingly, California employers seeking to conduct both standard and PERM recruitment must engage in a detailed examination of wage ranges for a specific occupation prior to placing any ads to ensure the processes are consistent and compliant with Senate Bill 1162 and PERM regulations.
[1] https://www.justice.gov/opa/pr/justice-labor-departments-reach-settlements-facebook-resolving-claims-discrimination-against (October 19, 2021)