Four Things CA Employers Need to Know About SB 1162 Pay Transparency Law

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California is joining other states and local jurisdictions such as CO, WA, New York City, and NY State pending legislation requiring job postings to include pay scale information. In CA, job postings are not the only place pay scale information will need to be more transparent. Current employees will also have transparency into pay for all company positions starting January 1, 2023.

California Senate Bill 1162 (SB 1162) significantly changes existing pay transparency laws and pay data reporting requirements. The new transparency may require employers to update policies and procedures to ensure compliance before January 2023. Here are four things C.A. employers need to know about SB 1162:

1. Updated California Civil Rights Department (CRD) reporting- Employers of 100 or more employees are required by the second Wednesday of May 2023, and May after that, to submit specific pay data to the CRD covering the prior calendar, or “Reporting Year.” The report must include the following information:

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The number of employees by race, ethnicity, and sex for ten job categories during a single-pay period snapshot period of your choice between October 1 and December 31 of the Reporting Year. The ten job categories are as follows:

  • Executive or senior-level officials and managers
  • First or mid-level officials and managers
  • Professionals
  • Technicians
  • Sales workers
  • Administrative support workers
  • Craft workers
  • Operatives
  • Laborers and helpers
  • Service workers

SB 1162 also requires reporting for the entire year on the above “snapshot census” whose earnings fall within each of the pay bands used by the U.S. Bureau of Labor Statistics in its Occupational Employment Statistics Survey, regardless of whether an employee worked the entire year. Other requirements include the following:

  • With each job category listed above, the median and mean hourly rates are calculated for each combination of race, ethnicity, and sex. This new data element is additional information required by SB 1162.
  • Each employee’s total number of hours worked is counted in each pay band during the Reporting Year.

2. Employers Will Need to Increase Wage Transparency with Employees- Already, CA law prohibits employers from asking job applicants about their salary history, compensation, and benefits during the interviewing process. Now, upon an applicant’s or an employee’s request, employers with 15 or more employees must provide the pay scale for the advertised position.

Employers must also provide employees with the pay scale for the role that they are currently in upon request. Also, if an employer uses a third party for a job posting, they must provide the pay scale to the third party and include the pay scale on the job posting.

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3. Pay transparency reporting due date updated- Current CA law requires such reports to be submitted each March. SB 1162 now requires all private employers of 100 or more employees by the second Wednesday of May 2023, and on or before the second Wednesday of each May thereafter, to submit specific pay data to the CRD covering the prior calendar, or “Reporting Year.” 

4. Labor contractors’ employees are included in SB 1162- Employers with 100 or more employees using labor contractors must submit a pay data report to the CRD. The labor contractor must supply all necessary payment data to the employer for reporting purposes. The employer must also disclose the ownership of all labor contractors when providing employee pay data in the report.

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SB 1162 creates additional compliance and reporting requirements for CA employers starting January 1, 2023. Data reporting, pay transparency, job posting, and records maintenance may be a heavy lift for your company. At Aspen HR, we can help you correct pay transparency issues you may have now and implement policies and procedures to keep you SB 1162 compliant in 2023 and beyond. Contact our team for more information.

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