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California Will Now Require Employers to Disclose Pay Ranges in Job Postings and Report Sure Information in an Effort to Fight Pay Disparity

On September 27, 2022, California Governor Newsom signed the state’s pay transparency invoice, SB 1162, into legislation, requiring employers with 15 or extra workers to reveal pay ranges in job postings, starting on January 1, 2023. California now joins Colorado, Washington, and New York Metropolis with this requirement. SB 1162 additionally requires sure employers with 100 or extra workers to report sure demographic info relating to their workers to the California Civil Rights Division, starting in Might 2023.

Disclosure of Pay Ranges

SB 1162 amends California Labor Code part 432.3 and requires employers with 15 or extra workers to reveal in any job postings, a “pay scale,” outlined because the “wage or hourly wage vary that the employer fairly expects to pay for the place.” Employers are additionally required to offer the pay scale to candidates and present workers for his or her place, upon request.

Equally, employers with 15 or extra workers who have interaction a 3rd celebration to announce, publish, publish, or in any other case make recognized a job posting should present the pay scale to the third celebration and require the third celebration to incorporate the pay scale in any job posting. Of notice, the legislation doesn’t outline the time period “job posting” and the legislation doesn’t require an employer to publish each job alternative. Accordingly, if a job isn’t posted (that means, doubtlessly, a candidate solely discovers a chance through word-of-mouth), there isn’t a requirement to offer the pay scale, however that info nonetheless must be supplied, if requested, to any candidates.

The legislation additional requires employers to keep up information of a job title and wage price historical past for every worker during that worker’s employment, plus three years after the top of such employment. The California Labor Commissioner could have authority to examine such information.

A violation of the pay scale disclosure or document retention necessities may end up in the Labor Commissioner assessing penalties starting from $100 to $10,000 per violation. SB 1162 features a restricted protected harbor for first violations for failure to incorporate pay scales in job postings, offering that no penalty could also be assessed if the employer is ready to present that every one job postings for open positions have been up to date to incorporate the required pay scale.

SB 1162 additionally offers that an individual who claims to be aggrieved by a violation of this part could convey a civil motion for injunctive reduction and every other reduction that the courtroom deems applicable. 

Reporting Necessities

SB 1162 additionally amends California Authorities Code part 12999. The legislation beforehand required non-public employers with 100 or extra workers who have been additionally obligated to file federal EEO-1 stories to submit a “pay knowledge report” to the California Civil Rights Division (previously the Division of Honest Employment and Housing). That pay knowledge report included the next info, based mostly on the staff employed throughout a single pay interval of the employer’s selection between October 1 and December 31:

  1. The variety of workers by race, ethnicity, and intercourse in every of the next job classes:
    • Govt or senior stage officers and managers.
    • First or mid-level officers and managers.
    • Professionals.
    • Technicians.
    • Gross sales employees.
    • Administrative assist employees.
    • Craft employees.
    • Operatives.
    • Laborers and helpers.
    • Service employees; and
  2. The variety of workers by race, ethnicity, and intercourse, whose annual earnings fall inside every of the pay bands utilized by america Bureau of Labor Statistics within the Occupational Employment Statistics survey.

Employers with a number of institutions have been allowed to submit a single, consolidated report masking all of their institutions.

SB 1162 made a number of vital modifications to those reporting necessities.

First, SB 1162 expands the employers coated by the reporting necessities to all non-public employers with 100 or extra workers, no matter whether or not the employer is obligated to file an EEO-1 report.

Second, coated employers should now additionally report the median and imply hourly price inside every job class, and for every mixture of race, ethnicity, and intercourse. The Governor defined these extra reporting necessities are supposed to higher determine gender and race-based pay disparities.

Third, with the passage of SB 1162, employers with a number of institutions are now not allowed to submit a consolidated report. These employers should submit a report for every separate institution, which can lead to vital extra compliance work for employers with vital numbers of worksites.

Fourth, employers which have 100 or extra workers employed by means of labor contractors should additionally produce a separate pay knowledge report masking the staff employed by means of labor contractors within the prior calendar 12 months. The labor contractor is required to provide all mandatory pay knowledge to the reporting employer.

All pay knowledge stories should be reported to the state on or earlier than the second Wednesday of Might 2023 (i.e., Might 10, 2023), and for annually thereafter on or earlier than the second Wednesday of Might.

Failure to file the required pay knowledge may lead to a civil penalty to not exceed $100 per worker or $200 for a subsequent failure to file the required report.

Subsequent Steps

Employers ought to ensure they’re conscious of the important thing deadlines related to this invoice – January 1, 2023 for the pay scale disclosures in job postings and document retention necessities, and Might 10, 2023 to offer up to date pay knowledge stories to the state.

Employers must also seek the advice of with counsel previous to revising job postings to make use of in 2023, to make sure such postings adjust to the brand new legislation.

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