On September 27, 2022, Governor Gavin Newsom signed Senate Bill 1162 into law. The new legislation establishes new pay data disclosure and reporting requirements on California businesses. Employers with 15 or more workers are now required by law to provide a wage scale for a position in any job advertisement and to allow an existing employee, upon request, to see his or her current wage scale. A pay range has been defined as a salary or hourly wage range that does not include bonuses, equity, or other forms of compensation.
Employers who use third parties to publish or announce job postings must provide the pay scale to the third party, and the third party must include it in their posting.
The Labor Commissioner will look into any pay scale reporting infractions. The Labor Commissioner has the power to impose a civil penalty of no less than $100 and no more than $10,000 for each violation. There is no penalty for the first violation if the employer can show that all job postings for open positions have been updated to include pay scales.
Senate Bill 1162 provides that employees who are harmed by a violation of wage and hour laws have the right to file a written complaint with the Labor Commissioner and pursue civil action for equitable relief. Furthermore, employers must keep records documenting each employee's job title and hourly wage rate history throughout each employee's employment and for three years after his or her termination. If records are not kept, and there is a dispute between an employee and his or her employer, there is a rebuttable presumption in favor of the employee.
Senate Bill 1162 also changes the reporting requirements for employers with 100 or more employees (at least one employee must be in California). These employers are now required to submit an annual pay data report to the Civil Rights Department (formerly known as the Department of Fair Employment and Housing) for the previous year. Previously, this information had to be submitted only by employers who were also required to submit an annual Employer Information Report (EEO-1) under federal rules. Now that pay data reports must include the median and mean hourly rate for each job category for each race, ethnicity, and sex combination, it is necessary.
Every year, the pay data reports are due on the second Wednesday of May. If you don't file the required report, you might have to pay a civil penalty of $100 for each employee for the first offense, and not more than $200 per employee for any subsequent offenses.
Senate Bill 1162 goes into effect on January 1, 2023. Therefore, beginning May 10th, 2023 , pay data reports will be due.
This is a good time for all employers including practice owners of dental, medical, optometric, and veterinary practices to reevaluate all their employment-focused contracts and job advertisements to be sure they comply with the new law. This includes making existing employees' pay wage scales easily accessible to them.
Contact us at Dental & Medical Counsel to see how we can help. We will review your employment contracts for compliance and accuracy. We offer a complimentary consultation with employment attorney Ali Oromchian, so contact us ASAP to get started.
At Dental & Medical Counsel, PC, we understand practice owners have trouble navigating the legal process. We believe every practice owner deserves the best advice and service so doctors can do what they do best, treat their patients. We make doctors' lives easier by providing expert guidance, so they can focus on their personal and professional aspirations.
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About Ali Oromchian, Esq.
Additionally, he is a frequent speaker on topics such as employment law, negotiation strategies, and contract and estate planning throughout North America. He is frequently quoted and has written articles for the California Dental Society, Progressive Dentist, Progressive Orthodontists, Dentistry Today, Dentaltown, and The New Dentist magazines.
Mr. Oromchian is a member of the California and District of Columbia Bar.
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