The Million Dollar-Mistake Businesses In California Cannot Afford To Make: Compliance Deadline Approaching!

• California’s Civil Rights Department has released new guidance on SB 1162 pay data reporting. 
• For California employers, this bill creates a long to-do list: calculate the mean and median hourly salary rates, meet the new deadline for filing pay data reports, learn the new separate requirement for labor contractors, and understand noncompliance penalties. 
• Advice for employers: Read up on the subject closely to keep your business compliant and running smoothly.  

California employers with 100 employees or more are no doubt aware of the pay data reporting requirements that came into effect in 2020, but the recent amendments under SB 1162 bring about considerable changes for 2023. 

California’s Civil Rights Department has released new guidance on SB 1162 pay data reporting. With the pay data reporting deadline quickly approaching on May 10, 2023, it’s crucial for companies to stay informed. 

With the new SB 1162, employers are now expected to compute and announce the average hourly rate of staff by business, job classification, race/ethnicity, and gender. 

Essentially, for California employers, this bill means that they need to:  

1). Calculate the mean and median hourly salary rates 

2). Realize there is a new deadline for completing and submitting pay data reports  

3). Learn the new, separate pay data report requirement for “labor contractors” 

4). Understand that there will be increased penalties for noncompliance   

According to the bill, the law has changed in that it will now:  

• Require a private employer that has 100 or more employees to submit a pay data report to the Civil Rights Department 
• Revise the deadline for private employers to submit the information to be on or before the second Wednesday of May 2023, with a yearly recurrence on the same day in following years 
• Require a private employer that has 100 or more employees hired through labor contractors to also submit a separate pay data report to the department for those employees in accordance with the new timeframe 
• Require the pay data reports to include the median and mean hourly rate for each combination of race, ethnicity, and sex within each job category 
• Delete a provision requiring employers with multiple establishments to submit a consolidated report 
• Permit a court to impose a fine of up to one hundred dollars ($100) per employee on any employer who neglects to file the necessary paperwork, and up to two hundred dollars ($200) for any repeat offenses 
• Require employers — upon request — to supply employees with the salary details for the job they are currently employed in 
• Require an employer with 15 or more employees to include the pay scale for a position in any job posting  
• Require employers to keep records of each employee’s job title and wage rate history for a designated period of time, available for review by the Labor Commissioner 
• Require businesses with 15 or more employees, who use a third party to announce, post, publish, or otherwise advertise job postings, to supply the pay scale to the third party, which must be included in the job posting 
• Require the Labor Commissioner to probe any grievances which suggest a breach of these regulations, and be given the power to impose a civil fine on any employer discovered to have contravened these stipulations 
• Authorize a person wronged by a breach of these regulations to pursue legal action for injunctive and all other applicable remedies 

As for the new monetary penalty, Trusaic emphasized during a webinar on Feb 14, “The first time you fail to do this, it’s a $100 penalty per employee if you fail to submit the report. Let’s say you have 5,000 employees; the first time you will be penalized half a million bucks, the second time — a million bucks. This is some real money in terms of non-compliance.” 

Advice for employers: Make sure you’re read up on the subject in order to keep your business running smoothly, your employees happy, and the government content.