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Although not the first of its kind, California Senate Bill 1162 (SB 1162) expands California’s already progressive pay and data reporting laws by requiring certain employers to provide more transparency on pay scales and expanding pay data reporting obligations for other employers.
Previously, in 2017, California passed the first mandatory transparency law requiring employers to provide pay scale information to job applicants upon reasonable request. Since then, Colorado, Washington, and New York City passed similar laws which are even more expansive in their transparency reporting requirements.
Not to be left behind, the proponents of SB 1162 seek to expand California’s transparency reporting requirements beyond job applicants and provide existing employees with pay scale information for their current positions upon request. In essence, before SB 1162, California employers did not have to disclose to current employees the pay ranges for any position, but once SB 1162 goes into effect, California employers will have to provide current employees with the pay scale for their current position, when they ask. In addition, as of January 1, 2023, California employers with 15 or more employees are required to provide pay scale information for any job posting.
Employers must also maintain records for a job title and wage rate history for each employee for a specified time frame, which is subject to inspection by the Labor Commissioner, who then may levy civil penalties for each violation. Similarly, aggrieved employees may also bring a civil action against their employer, seeking injunctive or other appropriate relief. The law also creates a rebuttable presumption in favor of an employee’s claim if an employer fails to keep such records.
SB 1162 also expands the pay data reporting obligation for certain California employers. In this regard, employers with 100 or more employees will have to:
Instead of submitting an Employer Information Report (EEO-1) in place of a pay data report, under the existing law, SB 1162 requires these employers to provide more detailed information on or before the second Wednesday of May for each year starting in 2023. This year, the reporting deadline for the new data (listed above) is May 10, 2023. Failing to follow the new guidelines can subject Employers to civil penalties of up to $100 per employee and up to $200 per employee for each subsequent failure.
It is important for California employers to understand and comply with SB 1162 to avoid substantial penalties. Attorneys at FMG are ready to help guide employers, ensure compliance with the new reporting requirements, and proactively identify any existing disparities in pay.