On Tuesday, September 27, 2022, Governor Newsom signed Senate Bill 1162 (“SB 1162”) into law, requiring job postings to include pay scale information and changing California’s pay data reporting requirements. SB 1162 will go into effect on January 1, 2023.
SB 1162 Pay Scale Disclosure
Current law in California requires an employer, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment. SB 1162 expands the transparency requirements by requiring an employer, with 15 or more employees, to include the pay scale for a position in any job posting. If an employer engages a third party to announce, post, publish, or otherwise make known a job posting, the employer must provide the pay scale to the third party, and it must include the pay scale in the job posting.
SB 1162 also requires an employer, regardless of size, to provide to an employee the pay scale for the position in which the employee is currently employed upon the employee’s request. A “pay scale” is defined as the salary or hourly wage range that the employer reasonably expects to pay for the position.
In addition, SB 1162 requires an employer to maintain records of a job title and wage rate history for each employee for the duration of the employment plus three years after the end of the employment. The DLSE may inspect these records to see if there is a pattern of wage discrepancy. SB 1162 will create a rebuttable presumption in favor of an employee’s claim if an employer fails to keep records in violation of these provisions.
SB 1162 allows penalties ranging from $100 to $10,000 per violation for failure to comply with the pay scale disclosure or record retention requirements. However, the DLSE will not assess a penalty for the first violation if the employer can demonstrate that all job postings for open positions have been updated to include the required pay scale information.
Pay Data Reporting
Existing law requires employers with 100 or more employees to submit annual pay data reports with number of employees in each establishment by race, ethnicity, and sex. Starting January 1, 2023, a private employer with 100 or more employees will have to report the median and mean hourly rate for each job category broken down by race, ethnicity, and sex for both traditional employees and those hired through labor contractors. Additionally, employers will have to submit a separate pay data report for each employee hired through labor contractors and disclose the ownership names of all labor contractors used to supply employees.
SB 1162 permits a civil penalty of up to $100 per employee for the initial failure to file a pay data report and $200 per employee for any subsequent failure.
SB 1162 Questions
If you have any questions regarding this Legal Alert, please contact the following attorneys from our office or the attorney with whom you typically consult.
Christopher Onstott
constott@kmtg.com | 916.321.4582
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