California joins several states (e.g., Washington, Colorado, New York City, etc.) now requiring specific businesses to provide a compensation range in any job posting. Specifically, all private employers in California with 100 or more employees are required to provide pay data reports to the California Civil Rights Department, even when they are submitting Employer Information Reports (EEO-1) to the Equal Employment Opportunity Commission (EEOC).
The new California law mirrors federal law requiring private employers with 100 or more employees to file annual EEO-1s with the EEOC. Employers are obligated to submit reports detailing the following data points:
- Number of employees organized by ethnicity, racial background, and sexual orientation in 10 different job categories
- Number of employees, organized by ethnicity, racial background, and sexual orientation whose annual earnings are within the pay bands utilized by the United States Bureau of Labor Statistics survey relating to Occupational Employment Statistics.
- The median and mean hourly rate within each job category, for each combination of ethnicity, race, and sexual orientation.
- Total number of hours worked by every employee in every pay band during a reporting year.
- An employer’s North American Industry Classification System (NAICS) code.
- An employer’s clarifying remarks about the information provided (not required).
Potential Penalties for Failing to Comply with SB 1162
If an employee claims they were harmed by a business failing to comply with the new pay disclosure requirements, then they have the option to take legal action. Specifically, an employee can file a complaint with the California Division of Labor Standards Enforcement (DLSE) within one year of the date the employee learned of a violation. In addition, an employee has the option to file a civil action for injunctive relief.
If the DLSE decides that a California business violated the pay disclosure law, the employer could be subjected to a large civil penalty (i.e., up to $10,000 per violation).
How Penalties are Determined
The labor commissioner is empowered to determine the specific amount of a penalty. The labor commissioner will review the totality of the circumstances, including any previous violations, when deciding the size and scope of the penalty. However, it is important to note that no penalty will be assessed for a first violation when an employer is able to demonstrate that all job postings for all positions have been proactively updated to include a compensation range.
Take Action and Make Sure Your Business is Compliant with the New Pay Range Disclosure Law and Schedule a No-Cost Consultation With a Knowledgeable Los Angeles Business Litigation Lawyer Today
The new pay range disclosure law is just one of many regulatory requirements that California business owners need to understand, satisfy, and ultimately ensure compliance. Failing to do so could expose your business to expensive and time-consuming litigation. If you need assistance achieving compliance with the new pay range disclosure law, and other business laws in California, consider contacting Omni Legal Group. Our firm represents clients throughout the greater Los Angeles area, including Beverly Hills, Santa Monica, Culver City, and many others. Our team of highly reputable Los Angeles business litigation attorneys possess a wealth of experience handling business law claims with hundreds of different results in an assortment of cases. For further information or schedule a no obligation consultation, please call Omni Legal Group at (855) 433-2226 or visit www.OmniLegalGroup.com to learn more.