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BREAKING: California Employers to Disclose Pay Ranges (US)

Because of Governor Newsom’s signature on SB 1162, California will quickly turn out to be the biggest state requiring affirmative disclosure of pay scale info, thus contributing to the state’s ongoing effort to extend pay transparency. Efficient January 1, 2023, many California employers will probably be required to incorporate pay scale info in job postings and disclose pay scale info to present staff. The invoice additionally makes vital adjustments to California’s present pay knowledge reporting necessities for personal employers with 100 or extra staff. Consequently, California employers should start familiarizing themselves in regards to the invoice and its new obligations:

What’s a “pay scale” and what should employers disclose?

California Labor Code part 432.3 defines “pay scale” because the “wage or hourly wage vary” an employer “fairly expects” to pay for a place. Presently, California solely requires employers to supply a place’s respective pay scale upon affordable request by an applicant. However, as of January 1, 2023, employers with 15 or extra staff should embody the pay scale for a place in any job posting (together with posts on third-party websites equivalent to LinkedIn or Certainly). Employers may even be required to supply a place’s pay scale to any present worker in that place, upon request.

What are the brand new pay knowledge reporting necessities?

SB 1162 additionally considerably adjustments present pay knowledge reporting necessities underneath California Authorities Code part 12999, together with the timing and content material of such studies. California employers with 100 or extra staff will probably be required to submit an annual pay knowledge report, together with median and imply hourly charges for race, ethnicity, and intercourse inside every job class, to the state. Employers with a number of institutions will now not be required to submit consolidated studies, however should nonetheless proceed to submit particular person studies for every institution.

As well as, personal employers with 100 or extra staff employed by labor contractors will probably be required to submit a separate pay knowledge report overlaying these staff employed by contractors within the prior calendar yr. Curiously, whereas the brand new legislation requires labor contractors to provide all vital pay knowledge to the employer, it doesn’t individually require labor contractors to truly gather the “vital pay knowledge,” nor does it outline the info required or deal with any potential points with regard to timing of those disclosures.

What about report retention?

The brand new legislation additionally introduces a report retention requirement; employers will probably be required to take care of data of job titles and wage price histories at some point of an worker’s employment and three years after termination of employment.

Are there any penalties for failing to adjust to the brand new legislation?

Sure – failure to adjust to pay scale disclosure necessities can lead to civil penalties starting from $100 to $10,000 per violation. Importantly, there is no such thing as a penalty for the primary violation if an employer can present that every one job postings have been up to date to incorporate the requisite pay scale. Employers who fail to retain pay scale data face extra civil penalties starting from $100 to $10,000 per violation.

Employers who fail to file well timed, compliant pay knowledge studies are topic to civil penalties as much as $100 per worker for the primary omission and $200 for subsequent omissions.

How ought to employers put together for the brand new legislation?

Coated employers ought to start planning for compliance now, together with by compiling and reviewing all related pay knowledge and/or working with counsel to conduct a proactive pay fairness audit to determine any potential areas of concern previous to the brand new legislation changing into efficient. Within the interim, we are going to proceed to watch developments associated to SB 1162 and its impression on California employers.


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