As of January 1, 2023, Washington state amended its Equal Pay and Opportunities Act to require
employers with 15 or more employees to include pay ranges in all job advertisements. Other states have followed, California (effective January 1, 2023), Colorado (currently in effect) and New York City (effective November 1, 2022), in this regard.The Washington law applies to employers with 15 or more employees, with at least 1 Washington-based employee.The employer must disclose the wage scale or salary range, and a general description of all benefits and other compensation to be offered to the hired applicant.The law also applies for remote work for companies that engage in business in Washington and if the work could be performed by Washington-based employees. It is important to note that employers do not need to disclose the information if the job will be performed entirely outside of Washington, but the job posting reaches applicants who would fill the position as a Washington-based employee.

The pay transparency requirements are an amendment to the Equal Pay and Opportunities Act ("EPOA").
The EPOA requires:
1. Employers must provide equal compensation to "similar-employed workers."
2. Career advancement opportunities may not be based on the gender of employees.
3. Employees are free to discuss their wages.
4. Employers cannot take retaliatory actions against employers for discussing wages, filing
complaints, or any other protected rights under the EPOA.
5. Employers cannot seek (or ask) for wage or salary history of an application, other than to
confirm an applicant's voluntary disclosure after an offer of employment is made.
More information can be found here:
https://lni.wa.gov/workers-rights/_docs/ese1.pdf?utm_medium=email&utm_source=govdelivery
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Smith Shapourian Mignano PC is available to answer any questions or concerns you may have regarding your compliance with the amended Equal Pay and Opportunities Act. This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.

On September 27, 2022, California Governor 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.  California follows Washington (effective January 1, 2023), Colorado (currently in effect) and New York City (effective November 1, 2022) in this regard.

California businesses historically were required to provide the pay scale (i.e., the salary or hourly wage range) only upon request by an applicant who completed an initial interview. The newly revised Labor Code section 432.3 maintains that applicant disclosure requirement and adds that, upon a current employee’s request, covered employers will be required to provide the pay scale the employer reasonably expects to pay for such employee’s currently-held position.

Second, California businesses with 15 or more employees will also be required to include an open position’s pay scale, meaning the salary or hourly rate an employer reasonably expects for the position, in any job posting, whether the employer itself posts the job or engages a third party service provider to post and manage job postings.  For companies who are headquartered abroad or in another states, experts are advising that if those companies have a single employee in California then they would likely be subject to the rules here, and should use the total national/international employee count to assess if the company's employee count is above 15, out of an abundance of caution.

Third, the new law also imposes record-keeping requirements on all businesses, regardless of size, and so businesses must maintain job title and salary history for all employees during their employment and for three (3) years thereafter.

The law establishes a new private right of action for injunctive and other relief, and there are civil penalties for violations of this statute. An aggrieved individual may file a written complaint with the Labor Commissioner within one year from the date they learned of the violation -- not when the violation may have occurred.  Technical violations of the new pay scale requirements could lead to penalties up to $10,000 per violation, but thankfully, the first penalty will not be assessed if the business has demonstrated they have cured the job posting violation by updating it to include the pay scale.

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Smith Shapourian Mignano PC is available to answer any questions or concerns you may have regarding your compliance with the newly revised Labor Code section 432.3.

This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.

Did you know that CalSavers, California's state-mandated retirement program, has changed to include employers with at least one eligible employee? Learn more here in this article.  

Our friend, Brittni Marino <brittni.marino@humaninterest.com>, told SSM about this update, and so we are passing it along to you, our clients and friends.  If you have any questions about setting up a retirement plan for your business, please feel free to reach out to Brittni at her email here.

This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.

Founders often ask us how to avoid being ousted after a financing event.  Law partner Teela C. Smith discussed this topic in a recent Vouch Insurance blog post entitled, "How Not to Get Written Out of Your Founder's Story."  Read her tips in the blog, and feel free to contact her directly at tsmith@smithshapourian.com if you have any questions or concerns.  

Smith Shapourian Mignano PC is available to answer any questions or concerns you may have regarding startup law topics and founder concerns.

This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.

For those founders who are not seeking equity financing at this time, or who are in between equity financing rounds, what kinds of alternatives exist in the financing landscape? 

Our startup clientele often explore a number of non-dilutive financing options, as VC financing is one of the most expensive types of capital.  Examples include loans, grants (i.e., research grants, translational grants, grants from Small Business Innovation Research and Small Business Technology Transfer programs), and royalty-financing, among others.  [FN1]

One of the most common questions we receive from our clients pertains to the difference between a regular loan and revenue based financing.  It is a hot topic in the startup community as startups explore alternatives to VC and begin to learn more about the benefits of non-dilutive financing options.  [FN 2]

To that end, our friend, Zach Hoene of Lighter Capital has provided this handy one-page executive summary as to two non-dilutive options (regular term loans and revenue based financing) for your consideration.  If you have any follow up questions, please feel free to reach out to Zach directly at  zhoene@lightercapital.com. 
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Footnotes:
1. See https://www.upcounsel.com/non-dilutive 
2. See https://www.fundstory.com/post/non-dilutive-capital-vs-dilutive-capital

This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.