Unintended Consequences of the Fair Pay Act


California takes a huge step forward by requiring employers to be transparent about wages. Gone are the days when HR and a few high-level folks know who gets paid what. The new law, created under the guise of equal pay for women, requires employers to reveal pay ranges for open positions upon request, it also prohibits polices forbidding employees from disclosing their wages. In my view, it’s just a matter of time until all CA employers list pay ranges with employment ads.

Companies like Glassdoor, will add fields to their site to capture salary ranges that candidates discover and before long, all job seekers will be able to avoid the lowballing game practiced by many, many companies. If you are not familiar with this scummy practice, it works like this. During the interview process, an employer will ask you what your current salary is and use the information to give you the lowest salary they can. The new law forbids this information being used when offering a salary, even if it is given voluntarily. But you should never share your salary history with a future employer.  The first person to talk about money, looses.

Another centerpiece of the new law is that the burden now falls on the employer that wage differentials are based on factors unrelated to gender. So, if an employer files a gender based pay claim, the employer has to prove it’s not so, taking the burden off of the employee!

The age of wage transparency is upon us!  And I for one, can’t wait!  The new law goes into effect after the new year.

Companies like SEMCO in Brazil are way ahead of the curve, not only are salaries shared, but employees can choose their own salary, which everyone will know about. This social pressure keeps folks from overpaying themselves.