Recent California Law Imposes New Obligations on Employers regarding Employee and Contractor Pay

California Governor Gavin Newsom recently signed The Pay Transparency for Pay Equity Act, S.B. 1162. The California law imposes new requirements on California employers regarding reporting and disclosing pay data about workers.

Starting in May 2023, private employers with 100 or more employees must submit an annual report to the California Civil Rights Department containing information about employees’ pay, including information about mean and median rates of pay, broken down by race, ethnicity, and sex. Additionally, private employers with 100 or more contracted workers must submit a similar annual report containing similar information about contractors’ pay, broken down by race, ethnicity, and sex. For employers with multiple establishments, the employer must submit a report covering each establishment.

Additionally, starting in January 2023, employers with 15 or more employees must include salary ranges in job postings. The new law also requires employers of any size, upon request, to provide current employees with the salary range for their positions. The law also requires employers to maintain records of a job title and wage rate history for each employee for a specified timeframe.

Employers who fail to comply with the new California law may be liable for civil penalties and other relief.

Employers should prepare now to comply with the new California law, including by reviewing and compiling pay data about workers. Contact your Kunzler Bean & Adamson attorneys if you have any questions about this law.