Disclosure of Pay Scales on Job Listings and Expanding Pay Data Reporting Requirements in California

By Roxana E. Verano, Esq. & Renia Zadourian, Esq.

Senate Bill No. 1162 (SB 1162) signed by Governor Newsom on September 27, 2022, and effective January 1, 2023, requires California Employers to submit additional employees’ pay data to the California Civil Rights Department (CRD, formerly the Department of Fair Employment and Housing) and to proactively provide pay scales in job postings.

Pay Data Reporting

Existing federal and state laws already require employers with 100 or more employees to submit annual pay data reports. SB 1162 additionally requires employers to submit pay data that includes the median and mean hourly rates for each job category broken down by race, ethnicity, and sex. The requirement also applies to employees hired through labor contractors. The first pay data reports are due by May 10,2023, and for each year thereafter on or before the second Wednesday of May.

The bill permits a court or the Labor commissioner to impose a civil penalty not to exceed one hundred dollars ($100) per employee upon any employer who fails to file the required report and not to exceed two hundred dollars ($200) per employee for a subsequent failure to file the required report.

Pay Scale Disclosures

SB 1162 amends Labor Code Section 432.3 and requires private employers with 15 or more employees to include the pay scale for the position in all job postings. This bill also requires employers to provide the pay scale information to third parties with whom the employer contracts to announce, post, publish, or otherwise make known a job posting. Pay scale is defined as the salary or hourly wage range the employer reasonably expects to pay for position. Additionally, upon any employee’s request, all employers regardless of size must provide the pay scale for the position in which the employee is currently employed.

SB 1162 requires an employer to maintain records of job titles and wage rate history for three (3) years after termination of employment. The California Labor Commissioner will have authority to inspect the records upon request.

An employer who fails to comply with the pay scale disclosure or record retention requirements may be subject to penalties ranging from $100 to $10,000 per violation.

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