Greater pay transparency has swept the nation over the past year or so, and now, California is getting its turn.
With the approval of SB 1162, California employers will be required to disclose pay scales to current employees and postings for open positions starting January 1, 2023. Employers will also have to report additional pay data to the California Civil Rights Department (CRD) (formerly known as the California Department of Fair Employment & Housing), such as median and mean hourly rates.
As for the driving reasons behind the bill, Employment Law Attorney, Mediator, and Arbitrator Angela Reddock-Wright explains in a recent ABC7 feature: “This is a part of a series of state laws designed to even the pay gap among women and minorities. SB 1162 will require employers to publicize pay scales in their job descriptions, even if they’ve placed the job description with third-party agencies like LinkedIn or Indeed.”
Stricter Pay Data Reporting
More stringent pay data reporting provisions are meant to address lacking pay transparency for new applicants and current employees and make California the largest state to mandate such extensive disclosure of pay scale information. Here are the major changes that’ll go into effect in January 2023, under Government Code Section 12999:
- Employers must report the median and mean hourly rate for each combination of race, sex, and ethnicity
- Pay reports are now due on the second Wednesday of May, on an annual basis
- Employers with multiple organizations no longer have to submit a consolidated report, but an individual report for each establishment
- Employers with 100 or more employees hired through labor contractors must now produce pay data, hours worked, race and ethnicity, and gender information in a separate report
Reddock-Wright details SB 1162’s new pay data reporting provisions: “If an employer is in California, and they have 15 or more employees, they are subject to this law. Employers with 100 or more employees are also required to publish the data with the Department of Fair Employment and Housing, and then that data becomes public to everyone.”
Greater Pay Scale Transparency
Most notably, SB 1162 puts California on par with the nationwide trend of pay transparency and wage range disclosure laws. Nevada bolstered their pay transparency laws in October 2021, preceded by Colorado, Connecticut, Maryland, Washington State, Cincinnati, and the City of Toledo. Here are the pay transparency changes coming to California in January 2023:
- Employers with over 15 employees must include a pay scale in all online job postings and provide that information to third parties posting their jobs
- All employers must provide a pay scale for a current employee’s position at the employee’s request, no matter the size of the company
How Employers Can Respond
With new pay scale disclosure requirements starting in January 2023 and updated pay reports beginning May 10, 2023, California employers are preparing for SB 1162’s upcoming changes.
According to Reddock-Wright, Employment Law Attorney, Mediator, and Arbitrator, updating compliance plans is a good first step: “Employers can start making compliance plans that align with new pay transparency provisions, such as gathering pay data and identifying any areas of concern. From there, it’s a matter of keeping up with pay data reporting deadlines to avoid penalties.”
SB 1162 Impact on Employees
SB 1162 is forecasted to benefit employees since upfront pay disclosures can expose pay disparities within companies and ultimately make it harder to hide discriminatory pay practices.
“It’s all designed to let applicants and job seekers know what to expect in terms of pay, and also for current employees to know if they’re being fairly paid compared to their colleagues and peers,” Angela concludes.
Be sure to follow Reddock-Wright on Facebook and Instagram @iamangelareddockwright, LinkedIn at Linkedin.com/in/angelareddock, and tune in to her weekly radio show, KBLA Talk 1580’s Legal Lens with Angela Reddock-Wright each Saturday and Sunday at 11 am PST, or catch past episodes on Anchor.fm/Spotify. You can learn more about the radio show here – https://angelareddock-wright.com/radio-show/.
Also, learn more about her book – The Workplace Transformed: 7 Crucial Lessons from the Global Pandemic – here – https://angelareddock-wright.com/book/.
For media inquiries for Angela, please reach out to firstname.lastname@example.org.
Experienced Employment Law Attorney, Mediator, Arbitrator, Investigator, Legal and Media Commentator
Twice-named a U.S. News Best Lawyer in America for employment and labor law, Angela Reddock-Wright is an employment and labor law attorney, mediator, arbitrator, and certified workplace and Title IX investigator (AWI-CH) in Los Angeles, CA. Known as the “Workplace Guru,” Angela is an influencer and leading authority on employment, workplace/HR, Title IX, hazing, and bullying issues. Furthermore, she’s been named a “Top 50 Woman Attorney” in California by Super Lawyers, a “Top California Employment Lawyer” by the Daily Journal and one of Los Angeles’ “Most Influential Minority and Women Attorneys” by the Los Angeles Business Journal.
Angela is a regular legal and media commentator and analyst and has appeared on such media outlets as Good Morning America, Entertainment Tonight, Law and Crime with Brian Ross, Court TV, CNN, NewsNation, ABC News, CBS News, Fox 11 News, KTLA-5, the Black News Channel, Fox Soul – The Black Report, NPR, KPCC, Airtalk-89.3, KJLH Front Page with Dominique DiPrima, the New York Times, the Washington Post, the LA Times, Forbes.com, Yahoo! Entertainment, People Magazine, Essence Magazine, the Los Angeles Sentinel, LA Focus, Daily Journal, Our Weekly and the Wave Newspapers.
Angela is a member of the panel of distinguished mediators and arbitrators with Judicate West, a California dispute resolution company. She also owns her own dispute resolution law firm, the Reddock Law Group of Los Angeles, specializing in the mediation, arbitration, and investigation of employment discrimination, harassment, retaliation, and other workplace claims, along with Title IX, sexual harassment, assault, and misconduct conduct cases, along with hazing and bullying cases in K-12 schools, colleges and universities, fraternities and sororities; fire, police and other public safety agencies and departments; and other private and public sector workplaces.
For more information regarding resources for employers, businesses, and employees during this time, connect with Angela on LinkedIn for new updates, or contact her here. You may also follow her on Instagram.
This communication is not legal advice. It is educational only. For legal advice, consult with an experienced employment law attorney in your state or city.