HR Policy Association

California Bill Would Require Increased Employee Pay Data Disclosure, Pay Transparency

The California State Senate passed a bill that would create substantial pay data reporting requirements for California employers and contractors and require pay scales to be part of job postings. The bill expands upon a previously passed law that requires diversity and pay disclosures. 

Currently, employers are required to submit annual EEO-1 pay data reports to the stateunder a law passed by the California legislature in 2020 (S.B. 973). The new bill (S.B. 1162) would instead require a standalone pay data report with increased disclosures, as well as prescribe certain pay transparency and recordkeeping requirements.   

Employers would be required to disclose the median hourly pay rate for each job category disaggregated by race, ethnicity, and sex. Employers would have to file a separate report for each of their establishments. The state would then publish all reports for each employer with more than 1,000 employees starting in 2026, and for each employer with at least 250 employees starting in 2027. 

Pay transparency and recordkeeping requirements also included: The bill also would require employers to include the pay scale for a position in any job posting, and provide the pay scale for a position to any employee currently employed in that position upon request. Additionally, the bill would require an employer to maintain records of a job title and wage history for each employee for the duration of their employment plus three years after. Such records would be open to inspection by the Labor Commissioner. 

Outlook: The bill passed the state senate by a vote of 27 to 9, and now will be considered by the state assembly, where it stands a good chance of passing and eventually being signed into law by Gov. Gavin Newsom (D). The measure comes as the federal Equal Employment Opportunity Commission considers whether to expand disclosure requirements – particularly restarting collection of pay data – once a Democratic majority is installed at the Commission, which could take place as early as later this summer.

Published on: May 27, 2022

Authors: Gregory Hoff

Topics: Employment Law