California (CA) SB 1162 Pay Scale Disclosure & Pay Data Reporting Updates

Background:

The CA Equal Pay Act has been around for decades with the intent of prohibiting employers from paying its employees less than employees of the opposite sex for equal work. Further, the Equal Pay Act has been amended almost annually since 2016. The latest significant amendment was via the passage of SB 1162 which brought about significant changes. The two major areas of focus are with regards to pay scale disclosure in job postings and changes in pay data reporting.

Employers with 15 or more employees nationwide, with at least one employee located in CA, must include a pay scale in job postings that can be filled by CA workers.

Penalties for noncompliance of the new pay scale disclosure requirements range from $100 to no more than $10,000 per violation.

CA employers with 100 or more employees and/or 100 or more workers hired through labor contractors, are subject to pay data reporting due May 10, 2023. In previous years, the report was due by the end of March; however, SB 1162 amended the deadline to the second Wednesday in May each year.

Penalties for failure to submit a report each year could result in a fine of $100 per employee and $200 per employee for subsequent violations. Additionally, the Civil Rights Department (CRD) is entitled to recover its costs in any enforcement action.

Resources:

• 2023 Pay Data Reporting Resources including the online portal, user guides, excel templates, FAQs and more: https://calcivilrights.ca.gov/paydatareporting/
• Webinar recording – Cammayo’s Compliance Talk: https://register.gotowebinar.com/recording/8910874766755716865
• Most recent updated FAQs with regards to pay scales in job postings: https://www.dir.ca.gov/dlse/california_equal_pay_act.htm

The FAQs referenced below, which can be found in the link above, may be of particular interest to employers.

Q15 – Who is counted as an employee to determine whether an employer has 15 or more employees?

Q32 – Must the pay scale include bonuses, tips or other benefits?

Q31 – How is “pay scale” defined?

Q33 – Must the pay scale include piece rate or commission wages?

Q34 – Can employers link to the salary range in an electronic posting or include a QR code in a paper posting that will take an applicant to salary information?

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information. This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.