On September 29, 2022, Governor Newsom signed Senate Bill 1162 (“SB-1162”) into law requiring employers with 100 or more employees to file annual pay data reports with the State of California and disclose pay scales. A report released by the California Civil Rights Department (“CRD” f.k.a. the Department of Fair Employment and Housing) in March 2022 found women, Hispanic/Latino and Black/African American workers were overrepresented in the lowest pay scales. The legislation aims to address the workplace pay disparities and occupational segregation based on race, ethnicity, and sex across the state, and promotes compliance with anti-discrimination laws.
Pay Data Reporting
Beginning May 10, 2023, California employers with 100 or more employees must provide the CRD a pay data report including information for the preceding year. In years to follow, reports are due annually on the second Wednesday of May. Companies utilizing labor contractors must provide a separate report including the pay data for labor contractors. Staffing companies that provide the labor contractors must cooperate with providing the necessary data to the companies where the labor contractors are assigned.
The practice of submitting the federal Employer Information Report (EEO-1) to the State of California will no longer be accepted, and instead employers must provide a report including the median and mean hourly rate for each combination of race, ethnicity, and sex within each job category. Employers with multiple establishments should submit a report for each establishment rather than a single consolidated report as previously required.
Civil penalties of up to one hundred dollars ($100) per employee may be imposed on employers for the first failure to submit timely pay data to the CRD, and up to two hundred dollars ($200) for subsequent violations.
Pay Scale Transparency
Beginning January 1, 2023, employers with fifteen (15) or more employees must include the pay scale for all job postings and must also provide pay scale information to third-party vendors posting job listings on the employers behalf. Additionally, upon request, companies must also provide pay scale information to current employees for their current positions.
Failure to post or provide the pay scales results in civil penalties of no less than one hundred dollars ($100) and no more than ten thousand dollars ($10,000) per violation. No penalties will be assessed for the first violation if the employer can show all job postings for open positions have been updated to include the required pay scales.
SV Employment Law Firm PC has a dedicated team that can answer questions regarding the new requirements mandated by SB-1162 and assist with complying with the reporting and posting requirements. If you have any questions about this new law or these issues more generally, please feel free to contact us.