Get Ready to Disclose Pay Scale Information
Joining states like Colorado, Nevada and Washington, California will soon require most employers to disclose pay scale information in job postings. In an effort to close the gender wage gap, Governor Newsom signed SB 1162 on September 27th, making significant changes to pay disclosure rules. The new law will go into effect January 1, 2023.
All Employers Must Comply
There are two new requirements for all employers, regardless of size. First, all employers will be required to provide a pay scale (i.e., hourly or salary wage range) to any current employee for their current position, upon request. Second, employers must now maintain records of job title and wage rate history for each employee during their employment and for three years after their separation.
It will be important for employers to ensure that these records are created and the retention requirements are followed, as the records are subject to inspection by the Labor Commissioner. And, SB 1162 creates a rebuttable presumption, in favor of an employee’s claim, if an employer fails to maintain these records.
15 or More Employees
Employers with 15 or more employees must also include the pay scale for a position in any job posting. The law does not define how to count “15 or more employees” so employers should err on the side of caution and count all employees currently on their payroll. If you work with third-party recruiters, you will need to provide them with the pay scale and ensure they include it in any posting as well.
Remember, there is already a requirement for all employers to provide an applicant with the pay scale for the job they applied for upon “reasonable request,” which has been interpreted to mean after their initial interview.
100 or More Employees
SB 1162 revises and expands the current pay data reporting required for private employers with 100 or more employees (and at least one California employee). Most notable, the law now requires these employers to file with the Civil Rights Department (formerly known as the Department of Fair Employment and Housing), regardless of whether they are required to file a federal EEO-1 with the EEOC. The report must now include median and mean hourly rates for each combination of race, ethnicity, and sex for each specified job category.
The deadline to file is the second Wednesday of May each year. Failure to file comes with stiff consequences—a civil penalty of $100 per employee for a first offense; $200 per employee for subsequent violations.