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October 5, 2022
Effective January 1, 2023, California has enacted The Pay Transparency for Pay Equity Act (“Act”). See SB 1162. Pursuant to the Act, California employers with more than 100 contract workers (i.e., employees hired through labor contractors) must disclose annual pay data broken down by gender, race, and ethnicity. The reports must be submitted to the California Civil Rights Department.
California employers with more than 15 workers also must disclose salary ranges on all job advertisements. This requirement is consistent with similar laws in Colorado, Washington, and New York City, and with a law currently pending in the New York State Legislature.
Moreover, California will require that employers of any size, upon request, provide existing employees with the salary range for their positions.
Failure to comply with the disclosure requirements, failure to maintain salary records, and failure to file timely and compliant pay data reports can result in civil penalties.
Covered employers should begin to plan for compliance, including compiling and reviewing pay data and conducting a pay equity audit. We can help.
*Special thanks to our paralegal, Ava Petrellese, for her contributions to this article.