SB 1162 Creates Additional Requirements for Pay Disclosure, Pay Data Reporting, and Record-keeping for California Employers
On September 27, 2022, Governor Newsom signed Senate Bill 1162 (“SB 1162”) into law which, effective January 1, 2023, imposes new disclosure requirements for job pay scales and data reporting, as well as record-keeping obligations. The bill also creates enforcement measures including penalties of up to $10,000 for violation of certain provisions. As outlined below, the new requirements depend on the employer’s size and whether the employer is a private or government entity.
Pay Scale Information
The new requirements concerning the disclosure of pay scale information apply to government and private employers alike. Whereas existing law only required an employer to provide job applicants with pay scale information (salary or hourly range) upon request, SB 1162 expands employers' disclosure requirements by (1) creating affirmative obligations to include information in job postings, and (2) extending disclosure rights to current employees in addition to job applicants. Specifically, the law provides that:
- All employers are required to provide, upon a current employee’s request, the pay scale for the position held by the employee.
- All employers with 15 or more employees are required to include the pay scale of positions in job postings. Additionally, if the employer engages a third party to “announce, post, publish, or otherwise make known a job posting,” then the employer must provide the pay scale to the third party to include in the job posting.
SB 1162 also creates enforcement measures for violations of pay scale disclosure requirements. Aggrieved persons may pursue a written complaint with the Labor Commissioner and/or bring a civil action for injunctive relief “and any other relief that the court deems appropriate.” Should the Labor Commissioner determine that an employer violated the law, an employer may be ordered to pay a civil penalty of at least $100 but no more than $10,000 per violation.
Record-keeping Requirements
SB 1162 creates new record-keeping requirements for public and private employers. Specifically, all employers are required to maintain records of the job title and wage rate history for each employee for the duration of their employment plus three years thereafter. Failure to maintain such records creates a rebuttable presumption in favor of an aggrieved person’s complaint against the employer.
Annual Pay Data Report
SB 1162 expands the content of annual data reports, expands data reporting to private employers with 100 or more employees regardless of whether they file an annual EEO-1 Report, alters the timeline for data reporting, and extends reporting to employees hired through labor contractors. The annual pay data reporting requirements remain confined to private employers of 100 or more employees.
SB 1162 makes the following changes to the law:
- Whereas existing law requires the submission of pay data reports on or before March 31st of each year, SB 1162 alters the deadline to the second Wednesday of May each year, starting May 2023. SB 1162 law does not affect the requirement of employers to file reports in 2021 and 2022 pursuant to existing law through December 31, 2022.
- Whereas existing law excludes pay data reporting by employers that file EEO-1 reports, SB 1162 requires pay data reports regardless of EEO-1 filing status.
- SB 1162 requires a separate pay data report for private employers that have 100 or more employees hired through labor contractors within the prior calendar year.
- SB 1162 expands the scope of pay data reports to include the median and mean hourly rate for each race, ethnicity, and sex within each job category.
- SB 1162 removes the existing requirement for employers with multiple establishments to submit a consolidated report. Employers with multiple establishments will still need to submit a report covering each establishment.
SB 1162 creates new civil penalties for violation of data reporting and higher penalties for repeat offenses. While existing law only provided for the recovery of costs associated with seeking an order for compliance, SB 1162 provides that the state may seek civil penalties not to exceed $100 per employee for any employer who fails to file the required report, and a penalty not to exceed $200 per employee for any subsequent failure to file the required report.
Impact on Employers
SB 1162 imposes a variety of new obligations that may carry significant fines for failure to comply. California employers should not hesitate to contact the authors of this alert or your usual AALRR employment/business counsel for compliance assistance with SB 1162, as well as existing record-keeping, pay data reporting, and record-keeping requirements.