With the recent expansion of pay transparency laws in Colorado, New York City, and Washington, it should come as no surprise to employers that California has also opted to expand its existing pay transparency laws.
On September 27, 2022, California Governor Gavin Newsom signed SB 1162, which broadens the state’s pay transparency laws by requiring employers to provide pay scale information and expanding pay data reporting obligations for certain employers.
The earliest of the law’s changes go into effect on January 1, 2023, but employers should now begin the process of updating their existing organizational policies and procedures to ensure timely compliance with the new regulation when it takes effect. Here’s a brief overview of existing law and the new requirements set forth in SB 1162.
Prior to the enactment of SB 1162, under the current law, employers are required to provide an applicant for employment with the pay scale information for the position the applicant is seeking, upon reasonable request. Current law does not require employers to provide existing employees pay scale information for their current positions. SB 1162 now affords California employees the right to request pay scale information and adds the additional mandate that employers must include pay scale information in job postings. The term “pay scale” is defined as “the salary or hourly wage range that the employer reasonably expects to pay for the position.” Effective January 1, 2023, California employers must comply with the following requirements:
- Employers must provide their employees with pay scale information for their current positions, when the information is requested.
- Employers with 15 or more employees must include in any job posting the pay scale information for the position sought to be filled; and
- Employers must maintain records of a job title and wage rate history for each employee for the duration of his or her employment, plus 3 years after the end of the employment in order for the Labor Commissioner to determine if there is a pattern of wage discrepancy.