California New Pay Transparency Law

On September 27, 2022, California Governor Gavin Newsom signed Senate Bill (SB) 1162 into law. This law builds upon and expands the existing SB 973, a 2020 law, which requires employers with 100 or more employees to submit pay data reports to the California Department of Fair Employment and Housing.

Effective January 1, 2023, employers with 100 or more employees will be required to submit pay data reports to the Civil Rights Department within the Business, Consumer Services, and Housing Agency on or before the second Wednesday of May 2023, and for each year thereafter. This requirement also applies to employers with 100 or more employees hired through temporary staffing agencies. These employers must provide a separate pay data report covering temporary employees.   

Under this new law, the submitted pay data report must include the median and mean hourly rate for each combination of race, ethnicity, and sex within each job category for both regular employees and those hired through temporary agencies.  

Unlike the existing law, employers with multiple offices will no longer be permitted to submit a consolidated pay data report. Employers must submit separate reports for each establishment.

More importantly, this law requires employers, upon request, to provide current employees the pay scale (salary or hourly wage range) for the position they currently hold. This law also requires employers with 15 or more employees to include the pay scale for a position in any job posting, including postings with third-party job search engines.

Employers who do not file pay data reports could face a civil penalty of up to $100 per employee, and $200 for each subsequent violation.

Should you have any questions or need assistance, please contact a member of the KMK Law Labor & Employment Group.

KMK Law articles and blog posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. The laws/regulations and interpretations thereof are evolving and subject to change. Although we will attempt to update articles/blog posts for material changes, the article/post may not reflect changes in laws/regulations or guidance issued after the date the article/post was published. Please consult with counsel of your choice regarding any specific questions you may have.

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