California Legislature Expands Pay Reporting and Disclosure Requirements for California Employers

Alerts / September 7, 2022

On Aug. 29, the California Legislature passed Senate Bill 1162. If signed into law by Gov. Newsom, the bill will impose significant new pay reporting and pay scale disclosure burdens upon employers on top of what is already required under existing law. Newsom has until Sept. 30 to sign or veto the bill.

Annual Pay Data Reports

Under current law, California Government Code § 12999 requires private California employers with 100 or more employees that are required to file annual EEO-1 reports with the U.S. Equal Employment Opportunity Commission to submit annual pay data reports to the California Department of Fair Employment and Housing no later than March 31 of each year. Submission of an EEO-1 report containing the same or substantially similar pay data information required under the statute is sufficient to comply with existing law.

Senate Bill 1162 seeks to require the submission of an annual pay data report to the California Civil Rights Department on or before the second Wednesday of each May that expands existing pay reporting obligations by:

  • Covering all private California employers with at least 100 employees, regardless of whether they are required to file an EEO-1 report under federal law.
  • Adding new categories of mandatory pay data including the median and mean hourly rates for each combination of race, ethnicity and gender within each specified job category.
  • Requiring employers with 100 or more workers engaged through “labor contractors” to submit a separate pay data report.
  • Prohibiting employers from submitting an EEO-1 report in lieu of the required pay data report.
  • Authorizing a court to assess civil penalties against any employer that fails to file the required report(s) in an amount not to exceed one hundred dollars ($100) per employee for an initial violation and up to two hundred dollars ($200) per employee for any subsequent violation thereafter.

Pay Scale Disclosures and Related Recordkeeping Requirements

Under the current version of California Labor Code § 432.3, employers are required to provide the hourly or salary wage range for a position to an applicant upon reasonable request – that is, to an individual who is not currently employed with the employer after the individual has completed an initial interview with the employer.

If signed into law, Senate Bill 1162 will impose additional disclosure obligations upon employers, including:

  • Upon reasonable request, an employer must disclose the hourly or salary wage range to its current employees for any positions held by the employees.
  • Employers with 15 or more employees must include in their job postings the salary or hourly wage range for a position, including in job postings published, announced, posted or otherwise made known by a third party.

In addition, the bill seeks to impose new recordkeeping obligations that require employers to maintain records of the job title and wage rate history for each employee for the duration of the employee’s employment and for three years following separation. Failure to keep the required records would subject an employer to a rebuttable presumption that it violated the law.

Finally, the bill authorizes the California Labor Commissioner to investigate complaints alleging violations of these requirements and specifies the remedies available for such violations. The bill also permits employees to bring a civil action for injunctive and any other appropriate relief.

For the latest development on Senate Bill (SB) 1162, please click here for more.

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