California’s SB 1162 to Demand Pay Transparency

New Law Requires Employers to Provide Pay Scales for Posted Positions

The days of keeping salaries under wraps have come to an end with the passage of Senate Bill 1162. The law expands the pay data report requirements for private employers with over 100 employees and requires employers to provide the pay scale for an employee’s current position upon request. Finally, the bill mandates that employers with 15 or more employees include a pay scale for all job postings.

At LNN, we know the importance of pay transparency and have long fought against pay discrimination in Los Angeles. With the passage of this law, we hope to help hold companies accountable for non-compliance. If your employer fails to comply with this or another law, contact our office at (213) 232-4848 to schedule a free consultation. 

What Does California’s SB 1162 Do?

On September 27, 2022, California Governor Gavin Newsom signed Senate Bill 1162 (SB 1162)  into law. The bill significantly expands the pay data report requirements for private employers with 100 or more employees. 

The pay data report provided to the Civil Rights Department within the Business, Consumer Services, and Housing Agency must include the “median and mean hourly rate for each combination of race, ethnicity, and sex with each job category.”

It would also require that employers provide an employer with the pay scale for their current position if requested. Finally, the law mandates that employers with 15 or more employees provide a pay scale for any posted job positions including those posted with third-party companies.

How Does It Affect Pay Transparency?

Proponents of the bill argue that the law is a step in the right direction for pay transparency. The hope is that by requiring employers to post pay scales and provide more detailed information in pay data reports it will end pay discrimination based on sex, race, or other factors.

What if My Employer Does Not Comply With SB 1162?

The law mandates civil penalties for employers that fail to comply. As noted in the legislation, the bill permits a civil penalty not to exceed $100 per employee for failing to file the required pay report and up to $200 per employee for subsequent violations. 

If your employer engages in discriminatory practices, they may be held liable through a separate legal action. It is strongly recommended that you speak with an attorney about your potential case. It is important to contact an attorney as early as possible in the process to ensure that your rights are protected.

Key Requirements Under SB 1162

California’s pay transparency law places clear, enforceable obligations on employers. These are not optional policies, but instead legal requirements that directly affect the hiring process.

Pay Scale Disclosure in Job Postings

If an employer has 15 or more employees, every job posting must include a pay scale. That means the salary or hourly range the employer reasonably expects to pay for the position. This applies to postings on company websites, job boards, and third-party platforms.

The rule also applies to remote roles that could be performed in California. Employers cannot avoid compliance by listing a job as remote or by outsourcing the posting to a recruiter.

Pay Scale Access for Employees

Current employees have the right to request the pay scale for their own position. Once requested, the employer must provide it. This enables employees to evaluate whether they are being paid fairly relative to the stated range.

Pay Data Reporting

Larger employers have to submit annual pay data reports to the California Civil Rights Department. These reports break down compensation by race, ethnicity, and sex across job categories and include average pay figures. The purpose of this requirement is to identify patterns of pay disparity at a systemic level, not just individual cases.

Recordkeeping Requirements

Employers must maintain records showing each employee’s job title and wage history throughout employment and for at least three years after separation. If an employer cannot produce these records during an investigation, they could be used as evidence in a discrimination claim.

Penalties for Non-Compliance

Every California employer should know that these violations carry real financial consequences, and each violation can add up quickly. For pay scale disclosure violations, employers face civil penalties ranging from $100 to $10,000 per violation. Each non-compliant job posting can be treated as a separate violation, which means exposure increases with every listing.

If an employer fails to provide pay scale information to a current employee upon request, that can also trigger penalties. For pay data reporting failures, the penalties are calculated per employee. Employers may face fines of $100 per employee for a first violation and $200 per employee for subsequent violations.

Beyond civil penalties, enforcement does not stop there. State agencies can seek court orders to force compliance, and violations may expose employers to broader litigation, including claims under other California employment laws.

Impact on Employers

SB 1162 has changed how employers approach hiring, with a focus on fairness and transparency for prospective employees. The law requires a clear picture of compensation on the front end of the employment relationship, which limits how employers can structure and justify pay decisions.

Employers now need defined, defensible pay ranges before they post a job. That requires evaluating compensation systems in advance rather than adjusting pay later in the hiring process.

The law also increases administrative demands, since employers have to keep track of compensation data and prepare annual reports if they have a certain number of employees. This creates ongoing compliance obligations, not a one-time adjustment.

From a risk standpoint, transparency makes disparities easier to identify. When pay ranges are public and employees can request internal data, it is not difficult to identify who makes what. This kind of open sharing of information is good for the workforce, but it can cause headaches for employers.  

At the same time, some employers see benefits from these requirements. Clear pay ranges can streamline hiring by weeding out people who were never going to be interested once they learned about the compensation levels. 

Contact Our Office for More Information

If you believe that your employer is engaging in discrimination or fails to comply with state or federal law, you should contact our office to schedule a consultation. Learn more about how we can help you hold a company accountable for its wrongdoing. 

Call (213) 232-4848 to speak directly with an attorney. All consultations are free and confidential. With decades of combined legal experience, we have successfully represented workers in discrimination lawsuits throughout Los Angeles. There are no fees unless we win. Call now to get started.