Practical Answers to Employment Law Issues
October 03, 2022 - Pay Equity, Legislation

California Adds to the Trend of States Requiring Greater Pay Transparency

Practical Considerations for Navigating the Upcoming Federal Ban on Predispute Arbitration and Class Action Waivers of Sexual Harassment and Assault Claims

On September 27, 2022, California’s Governor signed S.B. 1162, making significant changes to California’s existing pay transparency and reporting laws and joining the growing trend of jurisdictions requiring companies to disclose their pay ranges in job postings. Starting in 2023, S.B. 1162 adds several substantial and notable changes to California’s current pay transparency and reporting laws, including:

  • Requiring employers with 15 plus employees to disclose pay scales in each job posting for positions in California and disclose pay scale information to current California employees upon their request;
  • Adding to California’s existing pay data reporting obligations to require employers with 100 plus employees to include the median and mean hourly rates for their employees by job category and race, ethnicity, and gender in their annual reports to the California Civil Rights Department (CRD) (formerly known as the California Department of Fair Employment and Housing);
  • Requiring employers with 100 plus workers provided by “labor contractors,” such as staffing agencies, to submit a separate annual pay data report to the CRD relating to those contractors;
  • Changing the deadline for submitting the annual pay data report from March each year to the second Wednesday in May each year;
  • Implementing new obligations to retain records of job titles and wage rate history for each employee during employment and three years after employment ends; and
  • Enhancing penalties and remedies companies can face for non-compliance, including civil penalties ranging from $100 to $10,000 per violation for failing to comply with the pay scale disclosure requirements, and adding a new private right of action for violations of the pay disclosure and retention requirements.

Read our client alert.