California’s Equal Pay Act FAQs have been updated to address questions regarding the new pay transparency regulations (SB 1162). Answers to these questions will help employers comply with the requirements of SB 1162.
As of January 1, 2023, an employer with 15 or more employees must include the pay scale for a position in any job posting. If a covered employer engages with a third-party to announce, post, publish, or otherwise make a job posting known, they must provide the pay scale and the third-party must include it within the job posting.
Below we have highlighted some key points which assist in clarifying the new regulation:
Determining Employee Headcount
Although the statute does not specify how employers should count employees, the Labor Commissioner interprets this requirement consistently with how it counts employees for the 2022 COVID-19 Supplemental Paid Sick Leave and minimum wage rates. At least one of the employees must be currently located in California.
The Labor Commissioner interprets this to mean that the pay scale must be included within the job posting if the position may ever be filled in California, either in-person or remotely.
How is “pay scale” defined?
“Pay scale” is defined as the salary or hourly wage range the employer reasonably expects to pay for a position. An employer who intends to pay a set hourly amount or a set piece rate amount, and not a pay range, may provide that set hourly rate or set piece rate.
Must the pay scale include bonuses, tips, or other benefits?
No. Any compensation or tangible benefits provided in addition to a salary or hourly wage are not required to be posted. The employer may include this information to make its recruitment efforts more competitive and employers are cautioned other forms of compensation may be considered for equal pay purposes. A legally compliant job posting only requires the “salary or hourly wage range that the employer reasonably expects to pay for the position.”
Piece rate or Commission wages
If the position’s hourly or salary wage is based on a piece rate or commission, then the piece rate or commission range the employer reasonably expects to pay for the position must be included in the job posting.
Electronic posting or QR code to salary information does not comply
The law is clear: pay scale must be included within the posting.
Applicable penalties if an employer is in violation
An employer found in violation of the Labor Code section 432.3 may be subject to civil penalties. The civil penalties are no less than $100 and no more than $10,000 per violation.
For more information regarding the Equal Pay Act’s Pay Transparency regulations and steps to take to comply, contact your Cavignac Risk Advisor. Expanded Core clients can contact your HR Risk Control Advisor.