California Pay Transparency Law: Employer Requirements Under SB 1162
California has implemented pay transparency requirements through California Senate Bill 1162, which amended Labor Code § 432.3. These provisions impose specific obligations on employers regarding pay scale disclosures and recordkeeping.
Pay Scale Disclosure Requirements
Under California Senate Bill 1162, employers with 15 or more employees must include the pay scale for a position in any job posting. This requirement also applies to job postings made through third parties on behalf of the employer.
In addition:
- Employers must provide the pay scale for a position to a current employee upon reasonable request
- Employers are required to provide pay scale information to third-party recruiters engaged to post jobs
The statute defines “pay scale” as the salary or hourly wage range that the employer reasonably expects to pay for the position.
Recordkeeping Requirements
The law requires employers to maintain records of each employee’s job title and wage rate history for the duration of employment and for three years after separation.
These records must be made available for inspection by the California Labor Commissioner. Failure to maintain required records creates a rebuttable presumption in favor of the employee’s claim in an enforcement action.
Enforcement and Penalties
The Labor Commissioner is authorized to enforce these provisions. Employers who violate the job posting requirements may be subject to civil penalties, generally ranging from $100 to $10,000 per violation.
However, the law allows employers to cure a first violation of the job posting requirement if they demonstrate that all postings have been updated to include the required pay scale information.
Scope and Limitations
The statute applies to employers with at least one employee in California and governs positions that may be performed in California. It does not require employers to disclose bonuses, benefits, or other forms of compensation beyond the defined pay scale.
Conclusion
California Senate Bill 1162 establishes clear, enforceable requirements for pay scale disclosure and recordkeeping. Employers should ensure that job postings, internal processes, and record retention practices comply with Labor Code § 432.3 to avoid potential penalties and enforcement actions.
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