On September 27, 2022, California Governor Gavin Newsom signed Senate Bill (SB) 1162 into law. SB 1162 expands on the existing law SB 973 and took effect on January 1, 2023.
While the new law includes several changes, we’d like to call out two specific key requirements:
- Employers must now include the median and mean hourly rates for employees of each combination of race, ethnicity, and sex within each job category in the pay data reports that employers are required to submit to the California Civil Rights Department (CRD)
- Employers are required to provide pay ranges to current employees and in job postings
Expanded pay data reporting requirements
Previously, SB 973 (which required the submission of an annual pay data report to the CRD) only applied to employers (i) with 100 or more employees, and (ii) who were required under federal law to file an annual federal Employer Information Report (EEO-1). Under SB 1162, any employer with 100 or more employees in the United States and with at least one employee working in California is required to submit an annual pay data report, regardless of whether they are required to file a federal EEO-1 report. In addition, employers who have hired 100 or more employees through labor contractors in the prior calendar year will now be required to file a separate report for those employees who have been supplied by labor contractors. This report will need to identify the labor contractors.
SB 1162 also broadens SB 973 by requiring the median and mean hourly rates for each combination of race, ethnicity, and sex in the designated job categories. Employers with multiple establishments are required to submit a single report which covers each establishment, and they are no longer permitted to submit an EEO-1 in lieu of the required pay data report.
Employers have until May 10, 2023, to submit their first pay data reports. For each year thereafter, reports must be sent on (or before) the second Wednesday of May. Failing to submit a report can result in civil penalties of up to $100 per employee, and may further increase to $200 per employee for repeat violations.
Pay scale disclosure to employees and applicants
Beginning January 1, 2023, employers with 15 or more employees nationwide and at least one employee located in California must disclose the pay ranges for all job positions, including any remote positions that may be filled in California and jobs listed through third-party staffing agencies. In addition, employers must disclose pay scale information to job applicants and current employees (for their current position) upon request. Throughout the duration of each employee's employment and for three years after employment has ended, employers must retain employee records, including job titles and wage rate histories.
If the organization fails to comply with the pay disclosure requirements, penalties can range from $100 to $10,000 per violation and may also involve injunctive relief.
The CRD has issued an updated FAQ, which may be found here.
Cast & Crew currently provides its clients with pay data reports in compliance with EEO-1 and SB 973 requirements based on the information obtained through start paperwork and timecards. We will be updating Reporting+, one of our robust digital products, to allow clients to run their own payroll history and diversity reports on demand. Reporting+ is currently in limited availability. Please connect with your Sales or Solutions team to see if Reporting+ is a solution you can take advantage of today. For more information about Reporting+, please contact our Product Solutions team at ProductSolutions@castandcrew.com.
To request pay data reports directly, please direct your requests as follows:
Cast & Crew - email@example.com
CAPS - firstname.lastname@example.org
Media Services – Please contact your payroll coordinator
The TEAM Companies – Please contact the department head