California Passes Pay Transparency Law that Will Impact the PERM Recruitment Process

California has passed the Pay Transparency for Pay Equity Act (SB 1162), which takes effect on January 1, 2023. California joins a growing list of states that are passing pay transparency laws, including Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington.

The new law requires an employer with 15 or more employees to include the salary or hourly wage range in all job postings. This will impact employers who are sponsoring foreign national workers for permanent residence through a test of the labor market (commonly referred to as “PERM”), which requires job postings at the employer’s principal office, Sunday newspapers, and the California Job Bank (“CalJobs”) and other recruitment methods.

The Department of Labor regulations governing the test of the labor market for green card sponsorship only require that the salary be listed on the notice posted at the employer’s principal office; salaries are not required in any of the other forms of required recruitment.   With SB 1162, employers in California will need to include a salary range they reasonably expect to pay for the position on all job postings beginning January 1, 2023. 

Colorado passed a similar law that took effect on January 1, 2021. However, the Colorado Department of Labor and Employment (“CDLE”) has informally acknowledged that the Colorado pay transparency law will not be required for recruitment efforts in connection with the PERM process. California has not (yet) issued a similar statement if and how SB 1162 will apply to the PERM recruitment process.  

We will continue to monitor the application of SB 1162 and keep you updated.

This alert is for informational purposes only.  Please contact us if you would like to discuss these developments further.