On September 27, 2022, Governor Newsom signed Senate Bill 1162 (“SB 1162”) into law which, effective January 1, 2023, imposes new disclosure requirements for job pay scales and data reporting, as well as record-keeping obligations. The bill also creates enforcement measures including penalties of up to $10,000 for violation of certain provisions. Pay Scale Information SB 1162 expands employers' pay scale disclosure requirements by (1) creating affirmative obligations to include information in job postings, and (2) extending disclosure rights to current employees in addition to job applicants. Specifically, the law provides that: - All employers are required to provide, upon a current employee’s request, the pay scale for the position held by the employee.
- All employers with 15 or more employees are required to include the pay scale of positions in job postings. Additionally, if the employer engages a third party to “announce, post, publish, or otherwise make known a job posting,” then the employer must provide the pay scale to the third party to include in the job posting.
SB 1162 also creates enforcement measures for violations of pay scale disclosure requirements. Aggrieved persons may pursue a written complaint with the Labor Commissioner and/or bring a civil action for injunctive relief “and any other relief that the court deems appropriate.” Should the Labor Commissioner determine that an employer violated the law, the employer may be ordered to pay a civil penalty of at least $100, but no more than $10,000 per violation. Record-keeping Requirements SB 1162 also creates new record-keeping requirements. Specifically, employers are required to maintain records of the job title and wage rate history for each employee for the duration of their employment plus three years thereafter. Failure to maintain such records creates a rebuttable presumption in favor of an aggrieved person’s complaint against the employer. Annual Pay Data Reporting SB 1162 expands the content of annual data reports, expands data reporting to private employers with 100 or more employees regardless of whether they file an annual EEO-1 Report, alters the timeline for data reporting, and extends reporting to employees hired through labor contractors. These annual pay data reporting requirements apply to employers with 100 or more employees. SB 1162 makes the following changes to the law: - Whereas existing law requires the submission of pay data reports on or before March 31st of each year, SB 1162 alters the deadline to the second Wednesday of May each year, starting May 2023.
- Whereas existing law excludes pay data reporting by employers that file EEO-1 reports, SB 1162 requires pay data reports regardless of EEO-1 filing status.
- SB 1162 requires a separate pay data report for employers that have 100 or more employees hired through labor contractors within the prior calendar year.
- SB 1162 expands the scope of pay data reports to include the median and mean hourly rate for each race, ethnicity, and sex within each job category.
- SB 1162 removes the existing requirement for employers with multiple establishments to submit a consolidated report. Employers with multiple establishments will still need to submit a report covering each establishment.
SB 1162 creates new civil penalties for violation of data reporting and higher penalties for repeat offenses. While existing law only provided for the recovery of costs associated with seeking an order for compliance, SB 1162 provides that the State may seek civil penalties not to exceed $100 per employee for any employer who fails to file the required report, and a penalty not to exceed $200 per employee for any subsequent failure. Impact on Employers SB 1162 imposes a variety of new obligations, which in turn may carry significant fines for failure to comply. California employers should not hesitate to contact the author of this alert or your usual employment/business counsel for compliance assistance with SB 1162, as well as existing record-keeping, pay data reporting, and record-keeping requirements.
Reprinted with permission from AALRR.
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