California Enacts New Pay Scale Disclosure Requirements

Good news for California employees. More transparency is coming to California. On September 27, 2022, Governor Gavin signed Senate Bill (SB) 1162, which will take effect on January 1, 2023. This Bill aims to strengthen California’s commitment to improving pay equity and guarding women’s rights. SB 1162 requires California employers to disclose pay ranges in job advertisements. SB 1162 also expands pay data reporting requirements. This article discusses the first requirement under SB 1162; pay scale disclosures.

SB 1162: Pay Scale Disclosures

California follows other states, such as New York, Colorado, Washington, Nevada, Maryland, and Connecticut, in enacting a law that requires employers to disclose wage information to job applicants, and in some cases, to employees. From January 1, 2023, private and public California employers with 15 or more employees must include a pay scale in job postings. For California workers, especially women, this is a big thing. For long, California workers, especially women, have been affected by systemic inequalities that have left them making less than their colleagues. 

SB 1162 requires employers to include a pay scale for job openings being advertised, including those advertised by third parties. This means that employers will have to give the pay scale to third parties advertising for them to include it in their advertisements. However, SB 1162 does not make it clear whether nationwide job advertisements will need to include a pay scale if the job opening can be filled by someone in California. 

What is Pay Scale?

According to existing law, “pay scale” is the salary or hourly wage range an employer intends to pay an employee for a particular position. Therefore, this means that starting next year, California employers will be required to indicate in job postings the salary or hourly wage they intend to pay an employee for a particular position. However, it is not clear whether pay scale includes commissions, bonuses, paid time off, or health benefits. If it does, it could make a huge difference in the amount employers must disclose.

Pay Scale Requests

Under SB 1162, California employers are required to provide employees with a pay scale for their position upon request. Also, SB 1162 now makes it a job applicant’s right to be given pay information about an open position upon reasonable request. Before the enactment of SB 1162, job applicants could only request to know about the pay for an open position after completing an initial interview with the employer. SB 1162 now gives job applicants the right to be given pay information about an open position even if they have not completed an initial interview with the employer. 

What if an Employer Violates SB 1162?

If an employer fails to provide a pay scale in a job posting or upon reasonable request, they are in violation of the law. If a California employer fails to abide by this statute, an employee or job applicant can file a written complaint with the Labor Commissioner. After finding out about the violation, an employee has one year to file the complaint. 

Contact a California Employment Lawyer

Contact a qualified California employment lawyer if you have questions about the pay scale disclosure requirements under SB 1162.