©2024 Seyfarth Shaw LLP www.seyfarth.com 2024 Cal-Peculiarities | 175 In 2018 the Legislature enacted clarifying amendments. First, the law applied only to external applicants for a position. The pay scale did not need to be provided to internal applicants seeking a promotion or lateral move. Second, “pay scale” meant the salary or hourly wage range and did not include bonuses or equity ranges. Third, a “reasonable request” is made after the applicant has completed an initial interview; the pay scale need not be provided until the applicant has completed the initial interview and requested the pay scale.243 Further clarifications. Legislation effective in 2019 provided as follows. First, prior salary cannot be used to justify a wage differential, whether on its own or in combination with a lawful factor. Second, prior salary is a permissible factor to consider in pay decisions for current employees, such as in awarding a bonus, so long as any wage differential from the decision is justified by a specified permissible factor, such as a merit system. Third, the ban on asking about prior salary does not forbid employers to ask applicants about “salary expectations” for the position sought.244 Annual pay reports. In 2020, the Legislature created an onerous filing requirement for California employers that requires them to report potentially incomplete and misleading pay data that companies’ adversaries could use to falsely claim discriminatory wage disparities. The legislation follows the lead of an Obama Administration initiative to require certain gender, race, and ethnicity data on the federal annual Employer Information Report (EEO-1)— an initiative that the Trump Administration halted in 2017. California private employers with 100 or more employees that must file the federal report must also submit annual pay data reports to California’s Civil Rights Department (CRD) stating the number of employees by race, ethnicity, and sex in the following categories: all levels of officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers.245 The pay data report must include employees who work in, live in, or report to a location in California. The reported earnings should be determined utilizing W-2 Box 5 wages, and hours worked must include paid time off, such as vacation, paid sick time, and paid holidays. On September 27, 2022, Governor Newsom signed into law another groundbreaking pay transparency law, SB 1162.246 SB 1162 expanded pay scale disclosure requirements and amended the pay data reporting requirements passed in 2020. Effective January 1, 2023, employers are required to provide pay ranges on job postings and to requesting employees. The signing of SB 1162 makes California the largest state that requires the affirmative disclosure of pay scale information. SB 1162 takes California’s pay data reports a step further by requiring that employers report mean and median pay data and pay data of employees supplied by labor contractors. SB 1162 made the following changes to requirements regarding employer pay data reports under Government Code section 12999: Within each job category, employers must report the median and mean hourly rate by each combination of race, ethnicity, and sex.247 Reports are now due annually on the second Wednesday of May. The first report was due on May 10, 2023, based upon calendar year 2022 pay data.248Employers with multiple establishments are no longer required to submit a consolidated report. Instead, these employers must continue to submit a report for each establishment.249 Employers with 100 or more employees hired through labor contractors have a new obligation to produce data on pay, hours worked, race/ethnicity, and gender information in a separate report.250 On January 19, 2023, the CRD released Frequently Asked Questions that introduced new definitions, clarified prior reporting requirements, and answered questions concerning the contractor pay data reporting.251 On February 1, 2024, the CRD released Frequently Asked Questions that introduced a new definition of “remote
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