As our team has previously reported, California currently requires private employers with 100 or more employees, and who are required to file an annual EEO-1 report, to submit certain employee pay data to the state’s Civil Rights Department, formerly known as the Department of Fair Employment and Housing (“DFEH”), including pay data on the number of employees by race, ethnicity, and sex, in each of the 10 EEO-1 specified job categories.
As pay transparency rules continue to sweep the nation, the California legislature—never to be outdone—has passed its own amendments which will significantly expand employers’ current pay data reporting requirements and wage range disclosure obligations. The newly passed bill, “SB 1162,” is currently sitting on Governor Newsom’s desk for signature (or veto). With a potential compliance date of May 10, 2023 (and reporting due each year thereafter on or before the “second Wednesday of May”), Golden State employers are advised to take inventory now of additional steps they need to take in order to adequately prepare for and timely comply with SB 1162, including:
- Gathering median and mean hourly rate data for specific job categories, further categorized by their race, ethnicity, and sex;
- For employers with multiple establishments, preparing a separate pay data report for each establishment, doing away with the current requirement of a consolidated report;
- Gathering pay scale information by position, which would need to be provided to applicants and current employees upon request;
- For employers with 15 or more employees, preparing pay scale information to be added to current job postings and shared in any new job postings, including postings by third parties (not just upon request); and
- For employers with 100 or more employees hired through labor contractors, submitting a separate pay data report for those employees, so long as one employee is in California.
If enacted, SB 1162 also allows courts to impose civil penalties “not to exceed one hundred dollars ($100) per employee upon any employer who fails to file the required report and not to exceed two hundred dollars ($200) per employee upon any employer for a subsequent failure to file the required report.”
Governor Newsom has until September 30, 2022, to sign the bill, which would trigger a January 1, 2023, effective date and have massive impacts across the state. As we learned earlier this year, an ounce of prevention is worth a pound of cure. Blank Rome’s employment team stands by ready to assist.