California Employee Pay Data, Salaries and Wages Reporting

On February 17, Senator Monique Limon (D-Santa Barbara) introduced Senate Bill 1162 to make several changes to California’s pay data reporting law. The bill is principally co-authored by Senators Connie Leyva and Nancy Skinner, and Assembly Members Cristina Garcia and Ash Kalra. It is co-authored by Senators Dave Cortese and Scott Wiener, and Assembly Members Evan Low, Robert Rivas, Phil Ting, and Buffy Wicks.

SB 1162 would amend Section 12999 of the Government Code, amend Section 432.3 of the Labor Code, and add Section 432.4 to the Labor Code.

Section One of the bill would amend Government Code Section 12999 to change the current reporting deadline of March 31 to the second Wednesday of May each year for private employers of 100 or more employees to report wage data to the Department of Fair Employment and Housing (DFEH). It would also eliminate the provision that it applies to employers who are required to file an annual EEO-1 with the federal government.

In addition, the bill would require on or before the second Wednesday of May each year for a private employer that has 100 or more employees hired through labor contractors within the prior calendar year to submit a separate pay data report to the department covering the employees hired through labor contractors in the prior calendar year. The private employer would also be required to disclose on the pay data report the ownership names of all labor contractors used to supply employees.

The bill would also require reporting within each job category for each combination of race, ethnicity, and sex, the median and mean hourly rate. Moreover, for employers with multiple establishments, the employer would be required to submit a report covering each establishment, instead of a consolidated report under existing law. The report would also now include the employer’s North American Industry Classification System (NAICS) code.

SB 1162 would also allow, upon request by the department, a court to 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 bill would also require DFEH to publish each private employer’s pay data report on an internet website available to the public. However, the department would be prohibited from publishing any individually identifiable information that is associated with a specific person.

The term “labor contractor” would be added to the law 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. “Pay scale” would mean a salary or hourly wage range.

Section Two of the bill would amend Labor Code Section 432.3 to require an employer to provide the pay scale for a position to an applicant applying for employment. Existing law requires the employer to do so “upon reasonable request.” In addition, the bill would require the pay scale to be included in the job posting. An employer, upon request, would also be required to provide the pay scale for the position a person is currently employed in.

SB 1162 would require an employer to maintain records of a job description 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. These records must be open to inspection by the Labor Commissioner.

In addition, an employer that engages a third party to announce, post, publish, or otherwise make known a job posting is required to provide the pay scale to the third party. The third party must then provide the pay scale to applicants that view the job posting.

Under SB 1162, a person who claims to be aggrieved by a violation of this section would be allowed to file a written complaint with the Labor Commissioner within one year after the date the person learned of the violation. The complaint would be required to state the name and address of the employer and provide a detailed account of the alleged violation, as may be required by the Labor Commissioner.

In addition, a person who claims to be aggrieved by a violation of this section would also be allowed to bring a civil action for injunctive relief and any other relief that the court deems appropriate. The Labor Commissioner would be required to promptly investigate complaints alleging violation of this section.

If the Labor Commissioner finds that an employer has violated this section, then the Labor Commissioner may order the employer to pay a civil penalty of no less than $500 and no more than $10,000 per violation. The Labor Commissioner would be required to determine the amount of the penalty based on the totality of the circumstances, including, but not limited to, whether the employer has previously violated this section.

Finally, if an employer fails to keep records in violation of this section, there would be a rebuttable presumption in favor of the employee’s claim. All civil penalties collected pursuant to this section would be deposited into the Labor Enforcement and Compliance Fund for distribution to the Division of Labor Standards Enforcement.

Section Three of the bill would add Labor Code Section 432.4. An employer would be required to announce, post, publish, or otherwise make known any opportunity for promotion and the pay scale for the position to all current employees on the same calendar day and prior to making a promotion decision. An employer that engages a third party to announce, post, publish, or otherwise make known any opportunity for promotion would be required to provide the pay scale to the third party and the third party would have to provide the pay scale to any person that views the posting.

A person who claims to be aggrieved by a violation of this section would be allowed to file a written complaint with the Labor Commissioner within one year after the date that the person learned of the violation. The complaint would have to state the name and address of the employer and provide a detailed account of the alleged violation, as may be required by the commissioner.

In addition, a person who claims to be aggrieved by a violation of this section would also be allowed to bring a civil action for injunctive relief and any other relief that the court deems appropriate. The Labor Commissioner would be required to promptly investigate complaints alleging violation of this section.

If the Labor Commissioner finds that an employer has violated this section, then the Labor Commissioner may order the employer to pay a civil penalty of no less than $500 and no more than $10,000 per violation. The Labor Commissioner would be required to determine the amount of the penalty based on the totality of the circumstances, including, but not limited to, whether the employer has previously violated this section.

This new section of law would apply to all employers, including state and local government employers and the Legislature. All civil penalties collected pursuant to this section would have to be deposited into the Labor Enforcement and Compliance Fund for distribution to the Division of Labor Standards Enforcement.

The Labor Commissioner would be required to adopt rules and regulations as necessary to carry out the provisions of this section. The terms “opportunity for promotion” and “pay scale” would be defined.