California's legislature is considering an aggressive push toward increased pay transparency with SB 1162. If passed, SB 1162 would significantly broaden California's existing pay reporting requirements as well as create an additional proactive pay range disclosure requirement for job vacancy postings.
Under SB 1162, pay data reports would now have to include mean and median hourly rates of pay for workers itemized by race, ethnicity, and sex. This data would have to be provided for each job category as specified by the Department of Fair Employment and Housing (DFEH). Employers with multiple establishments in California would have to provide this data for each establishment and the State of California would be required to publish these reports.
In addition to this broadening of pay data reporting, SB 1162 would also require employers to publish a salary range for every posting of a vacant position.
California employers should know that these new requirements would apply to all employers who hire 100 or more employees through labor contractors or staffing agencies. Such employers would be required to file separate reports with their workers' information.
To offset the increased complexity of this reporting, SB 1162 would change the due date for reports to the second Wednesday of May, starting in 2023.
If an employer fails to comply with SB 1162's requirements, penalties would be imposed of $100 for first violations and $200 for subsequent violations.
If SB 1162 is ultimately passed, compliance with pay transparency requirements will become more complex and labor intensive for California employers. To protect themselves from exposure, employers should consult with competent counsel to set up their compliance practices.