Pay Data Reporting and Pay Transparency Requirements Could Expand in California

Could California employers be required to submit even more information to the Department of Fair Employment and Housing (“DFEH”) relating to pay data and pay transparency? The Answer: Maybe.

The Skinny:

Existing law requires private employers with 100 or more employees to annually file an Employer Information Report (“EEO-1”) and submit a pay data report to DFEH that contains specified employee information. In addition, existing law requires that the pay data report details the number of employees in each specified job category by race, ethnicity, and sex. Moreover, as it stands, DFEH is permitted to develop, publish on an annual basis, and publicize aggregate reports of California employers.

The Future?

If Senate Bill 1162 (“SB 1162”) reaches Governor Newson and he signs off, the bill would amend the current law in 10 important ways. The bill will:

1. Require a private employer that has 100 or more employees hired through labor contractors to also submit a separate pay data report to DFEH;
2. Require the pay data report to include the median and mean hourly pay rate for each employee based on race, ethnicity, and sex;
3. Require employers with multiple establishments to submit a report covering each establishment;
4. Remove the provision of law that permits an employer to submit an EEO-1 in lieu of a pay data report;
5. Permit a court to impose a civil penalty not to exceed one hundred dollars ($100) per employee upon any employer who fails to file the required report and increased civil penalties for subsequent failures to file the required report;
6. Require an employer, upon request, to provide to an employee the pay scale for the position in which the employee is currently employed—and not just applicants applying for the position;
7. Require an employer with 15 or more employees to include the pay scale for a position in any job posting;
8. Require an employer to maintain records of a job title and wage rate history for each employee for a specified timeframe, to be open to inspection by the Labor Commissioner;
9. Create a rebuttable presumption in favor of an employee’s claim if an employer fails to keep records in violation of these provisions; and
10. Require an employer with 15 or more employees to provide the pay scale in the job posting on third-party websites, and the third party would be required to include the same (for example, think LinkedIn).

The California Senate has already passed SB 1162, and it is now before the Assembly Appropriations Committee. If it reaches Governor Newsom’s desk, he will have to either sign or veto the bill. We will continue to monitor any development on this bill.

For more information about SB 1162 and how it can impact your business, contact us at info@mnklawyers.com.

This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.