California Senate bill could increase pay transparency
California enacted its Salary Data Reporting Act in 2020 in response to the Trump administration ordering the EEOC to stop its annual collection of salary data. California law largely mirrored federal law, but instead required private employers who must file an annual employer information report (EEO-1) under federal law to submit annual data to the California Department of Fair Employment and Housing (DFEH). It covered the same size of employers (over 100 employees who already file an EEO-1 form), required the same data disclosures, including the number of employees by race, ethnicity and gender in job categories specified, and even allowed California employers to submit to DFEH the same or substantially similar data that they submitted to the EEOC in Form EEO-1.
California Senate Bill 1162, however, diverges from federal law and imposes additional requirements on California employers. The bill expands the scope of the law to cover not just employers who already file an EEO-1 form, but all employers with 100 or more employees, with at least one California employee. It also requires those employers who hire workers through labor contractors in the previous calendar year to submit additional wage data reports. The bill includes additional wage data disclosure requirements to report the median and average hourly rate by race, ethnicity and gender in each job category. Significantly, employers will no longer be able to submit an EEO-1 report to DFEH to comply with the section.
Applicable law permits the DFEH to compile, publish on an annual basis and publish aggregate reports, provided that the aggregate reports are reasonably calculated to prevent the association of any data with an individual company or person. The new law may go further and oblige the state to publish the salary data report of each private employer on a publicly accessible website. It remains to be seen whether this provision will survive the final vote.
The bill has already passed the California Senate and must go through the California Assembly before being submitted to the governor’s office for approval. Employers with 100 or more employees should pay particular attention to the new reporting obligations, as the bill would also allow DFEH to seek civil penalties of $100.00 per employee if DFEH does not receive the report for the violation. initial and $200.00 per employee for subsequent violations. .
© 2022 Vedder AwardsNational Law Review, Volume XII, Number 231