SB 1162 expands pay reporting obligations, requires employers to maintain records of job titles and wage rate history for each of their employees, and mandates that the pay scale for positions be provided to current employees and included in any job postings.
The California Pay Reporting Law is far-reaching, impacting not only employers with headquarters in California but any employers that conduct business in California. SB 1162 requires pay transparency for both applicants and employees; and requires that pay ranges be included in job descriptions and made available upon request. Pay notification obligations are designed to ensure transparency and to prompt employers to adjust pay practices as necessary to ensure equity.
The changes related to pay data reporting under SB 1162 include the following:
As the reporting deadline looms, it’s important to understand what you will need to include in your report.
Employers are required to track job titles and wage rates for each of their job positions and maintain records for the duration of an employee’s tenure, plus three years following termination, to comply with pay data retention requirements. Your report will need to include:
In What You Need to Know About California’s SB 1162 Pay Equity Law, we provide some additional detail about the new law and its requirements, along with several fictitious examples of organizations taking steps to ensure compliance.
Keep in mind that while legal requirements and potential penalties certainly provide an impetus for employers to be equitable and transparent with their pay practices, that’s not the only reason to do so. Equity and transparency matter to employees—and potential employees too. According to Josh Bersin’s new pay equity study, “pay equity has now become more important to workers than their level of pay.”
Preparing to submit your data should start with a pay equity audit to identify, address, and correct any pay disparities. This process will help you identify what your compensation data looks like so you can file subsequent reports with confidence. By performing a pay audit you will be able to catch and address any “unintended” illegal pay practices and fix any issues before submitting your report. That could result in significant penalties saved (initially $100/impacted employee).
Trusaic can help you conduct a pay equity audit and ensure that you’re fulfilling all of your responsibilities. We’re just a phone call or click away.
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