Buried among previous online guidances on the California Equal Pay Act, the Labor Commissioner has issued FAQs to shed light on SB 1162, California’s new pay transparency (disclosure) law.

Effective January 1, 2023, SB 1162, requires employers to provide pay rate information to applicants and employees, include pay rate information in advertising if a company has more than 15 employees, and maintain records relating to pay rates.  Companies with more than 100 employees also have to maintain certain statistics and related data concerning pay and racial, ethnic and sex categories. See What’s New in 2023: Total Transparency: New Law Requires Pay Rate Disclosures (November 11, 2022).

The updated FAQs clarify:

• The “more than 15 employees” threshold is the same as qualification for 2022 COVID-19 Supplemental Paid Sick Leave, i.e., the total employees nationwide, with only one employee required to be in California.

• Pay scale must be listed in the advertisement itself and not require the reader to connect to another document via a link or QR code. The rule applies for in-state jobs as well as any positions that could be performed remotely from California.

• “Pay scale” is “the salary or hourly wage range the employer reasonably expects to pay for a position.” It can be a single number if the employer will only pay one amount and not a range.

• If the pay rate will have a commission or piece rate component, that needs to be included in “pay scale” disclosures, but not bonuses, tips, or other benefits.

• To enable state investigation for Equal Pay Act compliance, employers must maintain pay scale records for three years following a worker’s employment.

Take-Aways: Employers should determine what portions of SB 1162 cover their operations and ensure they are complying with those requirements.  Consulting with a knowledgeable employment attorney can assist in implementing these new laws.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Mind The Gap – Disparities Persist in California Pay Rates (March 25, 2022)
• Understanding California’s Equal Pay Act – Labor Commissioner Issues Frequently -Asked Questions On Workplace Gender Parity (April 22, 2016)
• California Labor Laws 2016: Fair Pay Act Aims To Level The Playing Field – Law Mandates Equal Pay Between Genders for Equal or Substantially Similar Work (November 18, 2015)

Helena Kobrin
January 13, 2023