California Pay Transparency Law and Startup Recruiting

Pay transparency is now the law in California. What does this mean for startup recruiting and job seekers?

Some context: As of Jan 1, any company with 15 or more workers must include pay ranges in job adverts. When other states like Colorado implemented this kind of rule, many employers responded by stating their remote positions could be done from anywhere in the US 𝘦𝘹𝘤𝘦𝘱𝘵 CO.

Not much chance of that happening in California - the talent pool for startups in particular is just too large here. A couple key points for both sides of the hiring equation:

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• Keep an eye out for salary ranges in the jobs you may apply to (sadly no rules around equity or bonuses yet)

• By comparing salary ranges for CA to those for other states, you can get a sense of how the company approaches geo-locating its compensation

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• Make sure the ranges you post are in good faith. Looking at Carta data on compensation, the gap between the 25th and 75th percentile for a given role is generally 25-40%. So a range of 200% is probably disingenuous.

• Give some thought to current employees - how will they feel when they inevitably read these ranges?

• Consider formalizing your pay bands. Many small startups have a messy approach to comp until they scale - it's worth cleaning that up at an earlier stage now.

Pay transparency is tough. Especially at small startups, a posted job could cover multiple levels and no two job responsibilities are identical. But candidates will naturally gravitate to companies that feel honest in this new paradigm.

Check out our recent webinar for lots more on pay transparency: https://lnkd.in/gVeyYtNM

Great chance to learn from some real experts like Lisa Wallace and Josh Steinfeld.