New bill makes employee pay more transparent

Senate Bill 1162 brings changes to business operations by requiring alterations to pay scale disclosure, job listings, annual reporting, record keeping

SACRAMENTO – A recently signed bill will require businesses in Tulare County and across the state to make their pay scales more transparent to future job applicants, as well as meet new requirements when it comes to their annual pay data reporting.

The new bill, Senate Bill (SB) 1162, was signed into law by Gov. Gavin Newsom on Sept. 27. Under this law, all employers must make pay scales available to future job applicants and employees. Pay scales determine how much income an employee will be paid as a wage or salary and is decided by employers.

“That’s going to be a big difference, because normally private industry is not required to list pay rates for open positions that they’re recruiting for,” Donette Silva Carter, CEO of the Tulare Chamber of Commerce, said.

SB 1162 requires employers with 15 or more employees to include the pay scale in job postings for any position. If the business is using a third party to publish their job postings, they must allow the third party access to pay scale information and it must be included in the job listing. 

According to Silva Carter, the law first required employers to make all of their pay salaries public but it was pulled out of the bill. She said the California Chamber of Commerce heavily advocated to have that part of the bill removed as well as several other chambers throughout the state, including Tulare. With the removal, they were supportive of SB 1162.

“We know that when you go to work in a public entity, like a government related public entity, that is something that comes with a job,” Silva Carter said. “But for the average person who’s working in a private organization, they didn’t want to have their salaries published…[Employers] didn’t want to be forced to publish the current pay of all their employees.”

In addition to posting pay scales, SB 1162 requires employers to keep record of job titles and wage history for all employees, which they will have to keep for the duration of the worker’s employment and three years after.

The bill also expands the state’s pay data reporting by establishing that pay data reports must include the medium and mean hourly pay rates by job category and every employee’s race, ethnicity and sex. This is for companies with 100 or more workers employed. The current law requires these employers to file an employer information report with the number of employees by race, ethnicity and sex but only for specified job categories.

According to the California Civil Rights Department (CRD), pay data reports, which are submitted to CRD, allow the department to efficiently identify wage patterns and allow for the enforcement of equal pay or anti-discrimination laws.

The bill also changes the timeframe that an employer is required to submit that information by the second Wednesday of every May annually instead of the former date, which is March 31. Under the bill’s new requirements, the deadline for the reports to be submitted in the upcoming year is May 10, 2023.  

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