Pay Transparency Bill Passes California Legislature

Related Practices & Jurisdictions

Tuesday, September 6, 2022

California’s legislature has handed a game-changing invoice that may impose important new necessities on employers in that state. The invoice, which seeks to up the ante on pay transparency, is now headed to Governor Gavin Newsom who has till September 30, 2022, to signal it, veto it, or permit it to go into regulation. Through Senate Bill (SB) 1162, California would:

(for employers with fifteen or extra workers) be a part of Colorado, Washington, New York City, and different municipalities in requiring employers to reveal pay scale in job postings;

add a requirement to offer the pay scale to present workers upon request;

impose first-of-their-kind (within the United States) necessities for employers with 100 or extra workers to report back to the state “inside every job class, for every mixture of race, ethnicity, and intercourse, the median and imply hourly fee;”

in a equally unprecedented transfer, require employers that retain 100 or extra employees by labor contractors to submit a pay information report protecting these employees;

require employers to submit these pay stories no matter whether or not they’re required to file an EEO-1 report, and the submitting date can be pushed from March to May; and

keep a file of every worker’s job title and wage historical past throughout employment and for 3 years thereafter.

California employers with no less than 100 workers are already required to submit pay information to the state yearly for current workers and to reveal the pay scale to candidates upon cheap request. Those necessities would proceed underneath the brand new regulation.
The invoice would supply penalties for failure to file the required stories or to make required disclosures.  It would permit people who find themselves aggrieved by a violation of the regulation to file a grievance with the Labor Commissioner or a civil motion for injunctive aid or different aid because the court docket deems acceptable.
This transfer in California might tip the scales for some employers, significantly these in industries like tech, with a heavy presence in California, to maneuver to routinely embrace pay scales in job postings. The invoice doesn’t specify how or if it is going to apply to postings for distant jobs which will or is probably not carried out in California.
Through the imply and median pay reporting necessities, California can be the primary jurisdiction to require employers to take a look at the distribution of workers all through a company by demographics. This requirement just isn’t an “apples to apples” evaluation of compensation, however quite a metric centered on whether or not sure demographic teams are represented within the larger paying roles inside a company.
With these adjustments, California regulation would tackle pay fairness from all fronts, together with prohibiting discrimination in pay for considerably equal work, prohibiting consideration of wage historical past in pay selections, equipping candidates with equal data from which to barter beginning pay, taking a look at metrics that might determine limitations to development to larger paying roles, and requiring reporting of compensation to the state.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume XII, Number 249

https://www.natlawreview.com/article/california-legislature-passes-bill-would-break-new-ground-pay-transparency

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