A special thanks to Amplify's Talent Partner Natasha Katoni for her help with this article.
On January 1, 2023, California’s new Senate Bill 1162 law surrounding pay disclosure and reporting went into effect. Note that, although other states have similar pay transparency laws, we’re focusing only on California in this article. So, here’s a summary of California’s new requirements:
In Job Advertisements: Employers with over 15 employees are required to include the pay scale for a position in every job posting (i.e. job advertisements, descriptions, etc.).
In Response to Current Employee Inquiries: All employers are required to provide the pay scale for the position (i.e. the level / title) in which a current employee is employed, upon that employee’s request.
All employers must also maintain records of job title and wage history for each employee during that employee’s tenure at the company, and for 3 years afterward.
If a company doesn’t include pay scale in its job postings and is therefore found to have violated this law, it may be subject to civil penalties between $100-$10,000 per violation. But, no penalties will be assessed for the first violation if the company promptly updates all of their job postings to include pay scale information.
The bill also requires employers with over 100 employees to submit annual pay data reports to California’s Civil Rights Department. The reports must include race, ethnicity, and sex information of all employees by job category, along with other information regarding hourly rates and annual earnings. To see the full list of reporting requirements, refer to Section 12999(b) of the bill, or go to the CRD’s website here.
The reports for 2022 were due on May 10, 2023, and are due annually going forward on the second Wednesday of May.
If an employer fails to file these pay data reports, the CRD can seek a court order requiring compliance and recovery of their associated costs. A court also can impose civil penalties of $100-200 per employee for subsequent failures to file the report.
In order to make sure you’re complying with these requirements, you can:
Q: How do I handle pay transparency laws if I am hiring in different states?
Q: What if the job I’m hiring for can be filled by candidates at different levels?
Q: Can you hire someone outside of the range you’ve listed in your posting?
A: When an employer posts a job, they should list the reasonable range that they are willing to pay in good faith. If you end up finding a candidate who needs to be paid outside of the listed range, and you make the decision to do so, you need to be ready to justify this decision.
Disclaimer: The content provided in the Amplify Legal Hub is intended for informational purposes only and should not be construed as legal advice. Always consult a qualified legal professional for advice tailored to your specific situation.