California passes new pay transparency law: What is it?

What is CA SB 1162 and who is affected by it?

On September 27,2022, Gov. Newsom and the CA State Legislature passed SB 1162, which is a new state law that would require employers to disclose the pay scales for their job postings. Starting on January 1, 2023, employers with at least 15 workers will be mandated to provide such information, whether it is through a third-party or through their own platform. In the event that an employer fails to meet such an obligation, an aggrieved worker can file a written complaint with the Labor Commissioner within a year after the violation. In the event that the labor commissioner finds the employer guilty, they will be mandated to pay a civil penalty ranging from $100 and $10,000 per violation.

On the other hand, private employers with 100 or more labor contractors and employees will be mandated to report a more detailed pay data report to the DFEH, which includes the median and mean hourly rate within each job category for each combination of race, ethnicity, and sex. This report would apply to all job positions, whether that is executive positions or managers, professionals, technicians, sales workers, etc. Employers with multiple establishments will be required to submit a separate pay data report for each establishment. For such a report, the DFEH would prohibit the publishing of any information that includes a specific individual. For an employer that fails to file the extensive report, the court could impose a civil penalty of not more than $100 per employee and not to exceed $200 for a subsequent failure.

For the full bill, please click here