Update Applicable to: All employers in California.
What happened? On August 30, 2022, the California Legislature passed Senate Bill 1162 (SB 1162), which expands pay transparency and reporting requirements for employers doing business in California, amending Section 12999 of the California Government Code and Section 432.3 of the California Labor Code.
What are the details? Once signed into law by Governor Newson, SB 1162 seek to impose the following changes:
Revise the deadline to submit pay data reports with the new annual deadline occurring on the second Wednesday of May.
Within each job category, SB 1162 would require that employers report the median and mean hourly rate by race, ethnicity, and sex. (Existing law, by comparison, requires only numerical counts of employees by race, ethnicity, and sex within each job category and pay band.)
Employers with 100 or more employees hired through labor contractors would have a new obligation to produce data on pay, hours worked, race/ethnicity, and gender information in a separate report. The most recent amendment to the bill requires that labor contractors “supply all necessary [payment] data to the private employer” but does not contain a separate mandate for the labor contractors to collect the “necessary pay data,” nor does it define the data required or address issues regarding timing of such disclosures.
The bill also attempts to hold labor contractors responsible by allowing a court to apportion an “appropriate amount” of any penalties to any labor contractor who failed to provide required pay data to the employer. The Department also requires that employers certify the accuracy of pay data reports, which would be practically impossible concerning labor contractors’ data.
Employers with more than 15 employees would be required to include a pay scale in all job postings (and to provide that information to third parties who post those jobs). New amendments to the bill would clarify that no penalty would apply for the first violation of this requirement if the employer can show that all job postings for open positions have been updated to include the pay scale.
All employers, regardless of size, would be required to provide a pay scale for a current employee’s position at the employee’s request—in addition to the requirement in existing law to provide candidates for employment with the pay scale for the candidate’s position is seeking.
Employers with multiple establishments would no longer be required to submit a consolidated report; rather, employers would continue to be required to submit a report for each establishment.
What do employers need to do? Employers should review the links provided above, prepare their 2023 reports, and determine whether they will need to submit data for employees of labor contractors. If so, make arrangements to obtain the needed information before the filing deadline.
Employers should also examine their job posting practices to prepare a plan to add pay ranges to those postings, regardless of where they appear, and create a process for responding to employee inquiries regarding current pay ranges.
