According to a Trusaic analysis of SB 973 pay data, the gender pay gap in California was $46 billion in 2020. The gender pay gap widens to $61 billion for women of color. As explained in National Women’s Law Center’s study, Salary Range Transparency Reduces Gender Wage Gaps, California recently enacted SB 1162 to impose additional pay reporting and pay transparency obligations upon employers to combat this enduring gender injustice. Prior to the enactment of SB1162, California Government Code Section 12999 required employers with 100 or more employees to annually submit to the Civil Rights Department pay data that accounts for the number of employees by race, ethnicity and sex in 10 job categories from executives, senior level officials, managers, professionals, technicians to service workers, with the assumption that those at the top of the 10 categories are making the most and the pay decreases with each step down. Employers with 100 or more workers hired through a labor contractor must also file this pay data report (or a separate report if the employer also directly employs 100 workers). Section 12999 also requires employers to provide the number of employees by race, ethnicity and sex whose annual earnings fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey. These reports are confidential and not subject to Public Records Act requests.
On September 27, 2022, California lawmakers enacted SB 1162 which amends Government Code Section 12999 to require the pay data report include within each job category, for each combination of race, ethnicity and sex, the mean and median hourly rate. The Legislature further amended Government Code Section 12999 to allow the Civil Rights Department to request a court to assess civil penalties not to exceed $100 per employee for the first violation and $200 for subsequent violations. Awarded civil penalties will go to the Civil Rights Enforcement and Litigation Fund. Although the draft legislation originally contemplated making these reports available to the public, the final version retains the reports’ confidential status.
SB 1162 also amended Labor Code Section 432.3 such that as of January 1, 2023, employees, regardless of the employer’s size, can request and receive a pay scale for their current position. Additionally, employers with 15 or more employees must include the pay scale in all job postings. Also, employers are now required to maintain records of the job title and wage rate history for each employee for the duration of their employment plus three years after the end of employment. Aggrieved employees and applicants may file a complaint with the Labor Commissioner or seek an injunctive and other appropriate relief through the courts. The Labor Commissioner may assess civil penalties between $100 and $10,000 per violation.
Although only time will tell whether SB 1162 will move the needle on the gender pay gap, these new transparency requirements arm employees and applicants with more information when applying for a job and negotiating raises. Women – let’s pool our collective strength to use it and achieve equal pay.
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Attorney at Law