What are the New Pay Transparency Requirements in California?

Our dedicated Pasadena employment law attorneys at Romero Law want all employees to understand their rights — no matter where they live or work in California. Last year, we talked about the new employment laws impacting workers beginning in 2023, and the minimum wage increases that apply to different work locations throughout the state.

One important note that was not included in those topics was the landmark pay transparency law that requires employers to disclose pay ranges in job postings, joining a growing number of states and municipalities that impose these requirements to improve pay equity.

Beyond the pay scale requirements, Senate Bill 1162, signed in September 2022 by Governor Gavin Newsom, further broke new ground in expanding pay data reporting processes and requirements for California employers.

Which Employers Must Add Pay Ranges to Job Postings in California?

Companies with at least 15 workers must add pay ranges to job postings, so prospective employees know what to expect financially from the position. The goal of the California law is to reduce gender and racial pay gaps.

In addition, the law requires employers with one hundred or more employees to submit annual pay data reports to the California Civil Rights Department (CRD). The reports must provide “[w]ithin each job category, for each combination of race, ethnicity, and sex, the median and mean hourly rate.”

This major change forces employers to provide a direct comparison of pay rates between different races, ethnicities, and gender groups. The goal of the comparisons is to plainly show pay differences between different groups of employees.

What Types of Penalties Do California Employers Face for Non-Compliance?

SB 1162 provides that the CRD may seek an order requiring an employer to comply with the reporting requirements. In doing so, CRD may be entitled to recover the costs associated with seeking the order.

The CRD may also request that a court impose civil penalties on an employer that fails to comply for an amount “not to exceed one hundred dollars ($100) per employee” for a first-time violation. For subsequent failures to submit the reports, civil penalties may rise to $200 per employee.

Financial consequences are first, and welcome change for non-compliance. Previously, the only available remedy was seeking a court order requiring employers to file their reports.

Are Your California Workplace Rights Being Violated?

If you believe your California employer is violating your workplace rights, as they concern your pay, overtime, or inclusion in a protected category contact our experienced Los Angeles County employment law attorneys to discuss your legal rights and options today.

Our employment law firm and bilingual staff offer services in both English and Spanish and are available now to discuss your case during a free consultation by calling 626-396-9900 or contacting us online.