California Set to Expand Employee Access to Salary Information Through Amendment to Pay Data Reporting Law

By: Hussain Turk

On August 30, 2022, the California legislature sent Senate Bill 1162 (SB 1162) to the desk of Governor Gavin Newsom, who will have until September 30, 2022 to either veto or sign the bill into law. If signed into law, SB 1162 will impose two general obligations upon California employers. First, it will require all private employers of at least 15 employees that are either based or hiring in California to include a job position’s pay scale or salary range in any corresponding job posting or advertisement. This includes job postings or advertisements through third parties.

Additionally, SB 1162 will require all California-based private employers of at least 100 employees to publish annual pay data reports. These pay data reports must contain three component sub-reporting requirements. The first sub-report must provide the number of employees by race, ethnicity, and sex within 10 specified job categories, ranging from “executive or senior level officials and managers” to “administrative support workers” to “service workers.” The second sub-report must identify the number of employees by race, ethnicity, and sex within each of the annual earnings pay bands established by the U.S. Bureau of Labor Statistics. The final sub-report must identify for each combination of race, ethnicity, and sex, the median and mean hourly pay rates within the 10 specified job categories.

Employers operating multiple establishments must submit a separate pay data report for each of its establishments – the bill expressly prohibits such employers from submitting consolidated reporting. An employer that initially fails to timely submit a compliant pay data report to the California Civil Rights Department (formerly, the Department of Fair Employment and Housing) is subject to a civil penalty of up to $100 per employee. Any subsequent failure may expose an employer to a civil penalty of up to $200 per employee. The due date for the pay data report is also altered under this bill to the second Wednesday of May of each year.

If SB 1162 is signed into law on or before September 30, 2022, California would be the first U.S. state to mandate the public availability of such metrics. To ensure compliance with this potential new law, employers should seek guidance from experienced counsel. Lewis Brisbois’ Labor & Employment attorneys are available to answer questions and address any concerns you may have.

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