California’s New Pay Transparency Act (SB-1162) Requirements

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Beginning on January 1, 2023, California’s recently passed Pay Transparency Act (SB-1162) will require employers with 15 or more employees to include a pay scale for a position in any job posting, for both internal and external job postings. This also applies to employers using third-parties to post the position.

SB-1162 also creates additional requirements for employers regarding annual pay data reporting due to the California Civil Rights Department (CRD), formerly known as the California Department of Fair Employment and Housing (DFEH), as well as adjusts the reporting due dates.

Governor Gavin Newsom signed SB-1162 into law on September 27, 2022.

Here are the key points from SB-1162:

  • Pay Scale Requirements

    • Employers with 15 or more employees must now provide a pay scale range for each position they post in a job posting, for both internal and external job postings. Employers must also provide these pay scale ranges if they work with a third-party to post the job posting.
    • Upon request, employers must provide employees with the pay scale for the position in which the employee is currently employed.
    • Employers of all sizes must keep records for each employee of their job title(s) and wage rate history throughout their employment and for three years after their termination.
  • Pay Data Reporting Requirements

    • Pay data reports will be due on May 10, 2023, and the second Wednesday in May each year afterward.
    • All private employers with 100 or more employees will now be required to submit an annual pay data report, regardless of whether they must submit the federal EEO-1 report.
    • Private employers with 100 or more workers hired through labor contractors (such as temporary staffing agencies) must also submit a separate pay data report for these workers.
    • Pay data reports will now also need to include the median and mean hourly rate for each combination of race, ethnicity, and sex in each job category.
    • Employers with multiple establishments will be required to submit a separate pay data report for each establishment; they will no longer need to submit a consolidated report.
    • Reports must be made available in a format that allows the CRD to search and sort the information using readily available software.

Further clarification may still be forthcoming from the CRD. We will continue to monitor developments and provide updates as needed.

For additional review of SB-1162, please visit the following: