California’s new salary transparency law requires many employers with 15 or more employees to include a pay range in their job postings. It also allows you to request a pay range for your own position. Employers have to provide state regulators with data about the pay they offer. If the law is violated, you can file a complaint with the Labor Commissioner’s Office or a lawsuit in civil court.
What is California’s new pay transparency law?
Senate Bill 1162 (SB 1162) is California’s new pay transparency and salary disclosure law. After several big amendments, the law passed the California State Legislature in August 2022. It was signed by Gov. Gavin Newsom on September 27, 2022. It became effective January 1, 2023.
The new law:
- requires California employers to submit a report of pay data to the California Civil Rights Department (CRD),
- requires many employers to include a pay scale or wage range in their job postings,
- allows workers to request the pay scale for their current position,
- lets job seekers and applicants request the pay scale for the job they are considering,
- requires employers to keep records of job titles and pay history for its employees, and
- forbids employers from asking job applicants about their wage history.1
The law mirrors other salary disclosure and pay equity laws in other jurisdictions, including:
- New York City,
- Colorado, and
New York state is also considering a similar employment law that would require pay scale disclosures.
Salary ranges for job postings
The most prominent requirement of SB 1162 is that employers provide a pay scale for jobs that they post. The job posting requirements of SB 1162 apply to employers that have 15 or more employees.2 Smaller employers must provide pay scales to job applicants who request one.3
According to the law, a “pay scale” is the salary or the hourly wage that the employer reasonably expects to pay for the position.4
Employers cannot get around this requirement by using a third party to do their hiring for them. If they use a third-party hiring service, employers must provide the pay scale to that service, which then has to include the information in the posting.5
The new salary disclosure law also gives workers the information they need early in the application process. It helps them make an informed decision about their future.
Pay range requests
The new salary transparency law in California requires all employers to provide pay scale information to:
- job applicants, and
- current employees.6
Job applicants can get the pay scale for the position for which they are applying. They can get the pay scale by making a reasonable request for the information.7 This can help them decide whether to continue to pursue the open position.
Current employees can get the pay scale for their own position with the employer. They can get the information by making a request for it.8 This can help current employees see whether they are being underpaid or discriminated against.
Salary recordkeeping and disclosure requirements
California SB 1162 requires large employers to keep records of the salaries and wages that it pays. It also requires employers to submit annual reports on their pay data. Those reports go to the California CRD.9
All employers have to keep records of job title and wage rate histories for all of its employees. These records must be retained for the duration of the worker’s employment, plus 3 years. They must be made available for inspection by the Labor Commissioner’s Office at the California Division of Labor Standards Enforcement (DLSE).10 Failing to keep these records creates a rebuttable presumption against the employer if an employee files a claim against them.11
Large employers in California have to submit their pay data to the CRD. Their pay data report must include the:
- number of employees by race, ethnicity, and sex during a single pay period from the last quarter of the prior year who worked in the following job categories:
- executive officials or senior managers,
- first or mid-level managers and officials,
- sales workers,
- administrative support workers,
- craft workers,
- laborers and helpers, and
- service workers;
- median and the mean hourly rate for each combination of race, ethnicity, and sex for each job category,
- number of employees by race, ethnicity, and sex whose wages are within the pay bands used in the Occupational Employment Statistics survey by the U.S. Bureau of Labor Statistics,
- total number of hours worked by each employee in each pay band, and
- employer’s North American Industry Classification System (NAICS) code.12
The information must be provided to the CRD in a format that is easily searchable and sortable.13 Any information in the report that could identify an individual is confidential.14 DLSE and CRD employees are forbidden from releasing such personal information.15 The CRD, however, can release reports to the public using non-personal information in the data.16 It keeps the data for at least 10 years.17
This legal requirement only applies to private employers that have 100 or more employees.18 Employers who hire 100 or more employees through labor contractors in the prior calendar year have to submit a separate pay data report that covers these other employees.19 A “labor contractor” is someone that supplies workers for the employer’s usual course of business.20
These reports have to be submitted by the second Wednesday of May every year.21
Failing to submit the report can lead to penalties for covered employers. The CRD can get an injunction, or a court order, to force compliance. The employer may have to pay for the costs of obtaining the order. Employers can also face a civil penalty of up to:
- $100 per employee for a first failure to submit the annual pay data report, and
- $200 per employee for a subsequent violation.22
No asking job applicants about their wage history
California SB 1162 also forbids all employers from seeking a job applicant’s salary history. Employers cannot ask about your prior compensation or other benefits orally or in writing, and cannot have an agent ask on their behalf.23 They cannot use salary history information as a factor in determining whether to offer you the job or how much to pay you for it.24 They can only ask what your salary expectation is for the job.25
This does not apply to people who currently work for the employer.26 If you are applying for a different job with your current employer, your salary history can be used.
If you voluntarily disclose your salary history to a potential employer without their solicitation, they can use that information when offering a salary.27
What can I do if the law is violated?
If your employer or a potential employer is violating California’s law on salary disclosure, you can:
- file a claim with the Labor Commissioner at the DLSE, and/or
- file a lawsuit.28
If you file a claim with the Labor Commissioner, the office will investigate your allegations. Your claims must be filed within 1 year. If the Commissioner finds a violation, a civil penalty of between $100 and $10,000 per violation can be imposed. However, if the violation was for not providing a pay scale and it was the employer’s first violation, no penalties will be assessed if the company comes into compliance with the law.29
You can also file a lawsuit against your current or prospective employer. This lawsuit can demand injunctive relief in the form of a court order to comply with the salary disclosure law. You may also be able to recover compensation for your other losses.30
Getting the legal advice of an attorney from a reputable law firm can help you decide how to best move forward.
- California Senate Bill (SB) 1162.
- California Labor Code 432.3(c)(3) LAB.
- California Labor Code 432.3(c)(1) LAB.
- California Labor Code 432.3(m)(1) LAB.
- California Labor Code 432.3(c)(5) LAB.
- California Labor Code 432.3(c)(1) and (2) LAB.
- California Labor Code 432.3(c)(1) LAB.
- California Labor Code 432.3(c)(2) LAB.
- California Government Code 12999 GOV.
- California Labor Code 432.3(c)(4) LAB.
- California Labor Code 432.3(d)(5) LAB.
- California Government Code 12999(b) GOV.
- California Government Code 12999(e) GOV.
- California Government Code 12999(h) GOV.
- California Government Code 12999(g) GOV.
- California Government Code 12999(i) GOV.
- California Government Code 12999(j) GOV.
- California Government Code 12999(a)(1) GOV.
- California Government Code 12999(a)(2) GOV.
- California Government Code 12999(k)(2) GOV.
- California Government Code 12999(a)(1) GOV.
- California Government Code 12999(f) GOV.
- California Labor Code 432.3(b) LAB.
- California Labor Code 432.3(a) LAB.
- California Labor Code 432.3(j) LAB.
- California Labor Code 432.3(m)(2) LAB.
- California Labor Code 432.3(h) and (i) LAB.
- California Labor Code 432.3(d) LAB.
- California Labor Code 432.3(d)(2) LAB.