Gov. Newsom Signs SB 1162 – Pay Data Reporting and Salary Range Postings

On September 27, 2022, Governor Gavin Newsom signed into law Senate Bill 1162, by Senator Monique Limon (D-Santa Barbara). SB 1162 amends Government Code Section 12999 and Labor Code Section 432.3 relating to salaries and wages.

Section 1 of the bill amends Government Code Section 12999 to change the reporting dates for submitting pay data reports from March 31, 2021 and every March 31 thereafter, to the second Wednesday of May 2023 and on or after the second Wednesday of May each year. The requirement applies to private employers that have 100 or more employees. The pay data report covers the prior calendar year.

In addition, the new law applies to a private employer that has 100 or more employees hired through labor contractors who are now required to submit a separate pay data report covering the employees hired through labor contractors in the prior calendar year. The due date is the second Wednesday of May 2023 or on or after the second Wednesday of May each year.

The new law also now requires, within each job category, for each combination of race, ethnicity, and sex, the median and mean hourly rate. The new law clarifies that, for employers with multiple establishments, the employer is required to submit a report covering each establishment.

The new law repealed the provision that, if an employer submits to the department a copy of the employer’s Employer Information Report, otherwise known as an EEO-1 Report, containing the same or substantially similar pay data information required under this section, then the employer is in compliance with this section. 

The new law also adds that a court may impose a civil penalty not to exceed $100 per employee upon any employer who fails to file the required report and not to exceed $200 per employee upon any employer for a subsequent failure to file the required report.

The new law also provides a definition of the term “labor contractor” to mean an individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business.

Section 2 of the bill amends Labor Code Section 432.3 to repeal the definition of the term “reasonable request.” Therefore, the new law requires an employer, upon request, to provide an employee the pay scale for the position in which the employee is currently employed.

In addition, an employer with 15 or more employees is required to include the pay scale for a position in any job posting. An employer is also required to maintain records of a job title and wage rate history for each employee for the duration of the employment plus three years after the end of the employment in order for the Labor Commissioner to determine if there is still a pattern of wage discrepancy. Moreover, these records must be open to inspection by the Labor Commissioner.

This new law also requires an employer with 15 or more employees that engages a third party to announce, post, publish, or otherwise make known a job posting to provide the pay scale to the third party. Thereafter, the third party is required to include the pay scale in the job posting.

Any person who claims a violation of this law may file a written complaint with the Labor Commissioner within one year after the date the person learned of the violation. In addition, any person may bring a civil action for injunctive relief and any other relief that the court deems appropriate. The Labor Commissioner is required to promptly investigate complaints alleging violation of this section.

If the Labor Commissioner makes a determination that an employer has violated this section, the Labor Commissioner may order the employer to pay a civil penalty of no less than $100 and no more than $10,000 per violation, based on the totality of the circumstances. In addition, if an employer fails to keep records in violation of this section, there is a rebuttable presumption in favor of the employee’s claim.

Finally, this new law specifies that all civil penalties collected pursuant to this section are to be deposited into the Labor Enforcement and Compliance Fund for distribution to the Division of Labor Standards Enforcement, for expenditure to cover reasonable ongoing costs of administering and enforcing this section. The term “pay scale” is defined as the salary or hourly wage range that the employer reasonably expects to pay for the position.