CA Pay Transparency Law [SB1162]

Payroll, Human Resources, Reporting

On Sept 27, 2022, Governor Gavin Newsom signed Senate Bill 1162, also known as the Pay Transparency Act which went into effect Jan 1st 2023. California now joins Colorado, Washington, New York City and other local jurisdictions, expanding pay scale transparency and pay data reporting requirements. Read on to see what this can mean for you!

Pay Transparency

What This Means for Employers:

  • Employers with 15 or more employees must now provide a pay scale range for every job requisition post (internal & external). Note: A “pay scale’” is defined as the salary or hourly wage range that the employer ‘reasonably expects’ to pay for the position.
  • Upon request, employers must also provide employees with the pay scale for the position in which the employee is currently employed.
  • Employers must keep records for each employee’s job title and wage rate history throughout their employment and for 3 years after termination.

Note: See how our HCM Software can assist you with title & rate history tracking!

Pay Data Reporting

What This Means for Employers:

  • Pay Data Reports are now due on the Second Wednesday in May each year [This year: May 10, 2023]
  • All private employers with 100 or more employees are required to submit an annual pay data report, regardless of completion of an EE0-1 (Federal) report.
  • Private employers with 100 or more labor contractors must submit a separate pay data report for these specific employees.
  • Businesses with Multiple Work Locations will be required to submit a separate pay data report for each establishment (can no longer consolidate)
  • Pay Data Report must now include the median and mean hourly rate for each combination of race, ethnicity, and sex in each category.

Resources:

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB1162

Disclaimer: These materials are provided for informational purposes only and are not intended as legal or tax advice. Readers of the IBS Blog should contact their legal or tax professionals to discuss how these matters relate to their individual circumstances.

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