By Kim Silvers, SPHR, PHRca
Governor Newsom signed Senate Bill 1162 (SB 1162) this week, furthering the pay information CA employers must share with applicants, employees, and the state. This body of law has been creeping up around the country and now it’s in full force on January 1, 2023 for the Golden State. Here are a few of the highlights that will change how you post jobs, share salary ranges, keep records, and report a whole new level of pay and hours worked data to the state each year.
For all CA employers regardless of size:
- An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment. (This is a current law that will continue.)
- An employer, upon request, shall provide an employee the pay scale for the position in which the employee is currently employed.
- An employer shall maintain records of a job title and wage rate history for each employee for the duration of the employment plus three years after the end of the employment.
For CA employers with 15 or more employees, all of the above plus:
- The employer must include the pay scale for a position in any job posting. If the employer uses a third party to announce, post, or publish a job posting they must post the pay scale on the job posting as well.
For CA Employer with 100 or more employees, all of the above plus:
- Since 2020, large employers (those with 100 or more employees on payroll) must report pay data to the CA Civil Rights Department (now the “CRD”, formerly the CA Dept. of Fair Employment and Housing). The new reports in 2023 will have more data points and include the data for employees in 10 job categories. (We’ll not list all of those here.) In addition, the employer will report on the number of employees by race, ethnicity and sex whose earnings fall within each of the pay bands used by the U.S. Bureau of Labor Statistics. (Pulling this information from the W-2s is the data source.) In addition, within each of the 10 job categories, the median and mean hourly rate by race, ethnicity and sex must be listed. The total hours worked by each employee in the reporting year must also be included.
- Employers with 100 or more employees hired through labor contractors will be required to send separate pay data to the CRD for that group.
- All of this information is pulled from a single pay period between October 1 and December 31 of the “reporting year” (i.e., the prior calendar year). This new report format must be filed by the second Wednesday of May for the prior year’s pay data.
We’ll have more details as we get closer to the effective date. A few things we suggest employers begin:
- Revamp your internal and external job postings to include pay ranges on and after January 1, 2023.
- Consider how/what information you are tracking for your employees. If you have 100 or more employees then you‘ll need to establish a database to track the job categories, race, ethnicity and sex for each employee, along with their pay rate. Your payroll provider will be your best resource for this software.
- Consider setting pay ranges for your current positions before you have job postings. We can help with external salary survey data for some positions and setting up a base pay structure. The more structure and consistency, the better you will be prepared.
Train your managers on what they may and may not ask job applicants. One of these “may nots” is salary history at prior places of employment. Ensure your employment application does not include this inquiry box any longer. Employers are still permitted to ask an applicant about their salary expectation for the position being applied for.
More to come on how to execute these new requirements. Remember, it’s all transparent beginning January 1, 2023, except sharing individuals’ pay data.
This is not to be considered legal advice.
 The law defines “pay scale “as the salary or hourly wage range that the employer reasonably expects to pay for the position.