Late in September of this year California enacted SB 1162 with additional reporting requirements for many San Diego employers. SB 1162 amended California Government and Labor Code sections of the law to require additional reporting of payroll-related information while increasing pay scale transparency. The changes will take effect on January 1, 2023.
Pay Data Reporting Requirement Changes
Presently all California employers with more than 100 employees are required to who must provide an annual Employer Information Report known as the EEO-1 to the federal Equal Employment Opportunity Commission as well as a submission of pay data to the California Civil Rights Department on or before March 31 of the calendar year. Under the present laws most employers could submit the same EEO-1 forms to both agencies.
Beginning on May 10, 2023 (an on the second Wednesday of May each subsequent year) California employers with more than 100 employees will be required to submit a pay data report to the California Civil Rights Department. SB 1162 expands the data which must be disclosed relating to race, ethnicity and sex in specific job classifications contained in the EEO-1 form to include additional disclosures of median and mean hourly rate for each separate group (race, ethnicity and sex) within each category of jobs within the report. Therefore, California and San Diego employers will no longer be able to simply submit the federal EEO-1 to our California Civil Rights Department.
Additional Challenges for Employers with “Contracted Workers”
SB 1162 with additional reporting requirements for San Diego employers is also intended to increase “pay transparency” and provide additional protections for contracted workers. Employers with more than 100 employees which have been hired through a “labor contractor” in the previous calendar year must also submit an additional pay data report with extended information, as well as the names of every labor contractor who provided employees in the previous year. This report is also due on the second Wednesday of May.
Labor contractors are specified under SB 1162 to be “an individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business.” As a result the report does not require disclosure of contracted labor which is outside of the course of the provider of work. SB 1162 now requires all labor contractors to provide employers with “all necessary pay data” required to complete this report.
Substantial Change in SB 1162 for Those with 15 or More Employees
The impact of SB 1162 with additional reporting requirements for San Diego employers is not limited to those with more than 100 workers. Presently, California employers are required to disclose the pay scale for a potential position “upon reasonable request.” SB 1162 adds a substantial requirement for employers to include the pay scale for a position in any job opening after January 1, 2023. This also extends to labor contractors or third parties engaged by a company to list, post, publish or announce their job postings.
SB 1162 also creates new recordkeeping requirements for San Diego and Southern California employers. Employers must maintain records of each employee’s job title(s) and wage history for the duration of the employment and for three years after termination of the employment relationship. The new law provides that these records shall be open to inspection by the Labor Commissioner and creates a new rebuttable presumption in favor of any employee’s legal claim if the employer fails to maintain these records.
Do you have questions about your company’s new responsibilities under SB 1162? The corporate attorneys and employer defense lawyers at the Watkins Firm have served San Diego and Southern California for more than four decades. We invite you to draw on our experience and legal skill, review the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
