California law will require companies to post salary ranges on job listings

California on Tuesday passed a law 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 Governor Gavin Newsom, who has until Sept. 30 to sign or veto. 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, Alphabet and Walt Disney. 

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 around around 83% of what men do, according to US Census Bureau data — a figure that hasn't budged much in recent years. Black and Hispanic women earn even less, on average, than their White counterparts. 

Read more: What New York City's salary transparency law means for HR

California joins Colorado, New York City and Washington state in adopting the job-posting tactic. Only Colorado's law is currently in effect; New York City-based employers will have to start listing pay ranges starting on Nov. 1. The New York state legislature also passed a similar bill that's awaiting Governor 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, the 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." 

Read more: Salary transparency laws strive to fix damaging pay gaps — but what are they missing?

The California Chamber of Commerce opposes the bill, even after lawmakers stripped a requirement that would make 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.