California Senate Bill 1162 was signed on September 17, 2022, and went into effect on January 1, 2023.
The law imposes two significant requirements for employers. Similar to other states and municipalities (like NYC), employers with 15 or more employees need to post a pay scale for job postings. However, the unique part of this law requires that companies with 100 or more employees report pay data to the state that breaks down compensation for employees and contractors by race, ethnicity, gender, and job category.
If you are an employer now faced with the task of reporting pay data to the state, how are you going about it? What is interesting is that the State has mandated what has to be reported, but not necessarily how it needs to be reported. For example, the bill requires you to disclose:
- The number of employees by race, ethnicity, and gender in 10 different job categories;
- Within each of the job categories, for each combination of race, ethnicity, and gender, the mean and median hourly rate;
- The number of employees by race, ethnicity, and gender whose annual earnings fall within each of the pay bands used by the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics Survey;
- The total number of hours worked by each employee counted in each pay band during the reporting year; and
- For covered employers with multiple establishments, there must be a separate report with this pay data, above, which covers each establishment.
Whether your organization was already working on pay equity or if this is a new initiative, the question is how you can document the required information. The simple truth is, you have all of this information, the trick is figuring out the best way to put it together into a digestible (and actionable) format.
This is where the help of an automated system can make a real difference. Our Analytics solution comes with all the tools you need to quickly and repeatably output the data you need to report and analyze.
Whether you use our compensation solution or not, our analytics capabilities can effortlessly produce the required reporting data right out of the box. You can also configure the dashboard outputs to any needs you have.
The goal of California’s legislation is in the intention and the action taken by the employers based on the information. That is why they have left some leeway in the reporting requirements because the concern is more about collecting and analyzing the information. They want substantive change, not necessarily punitive action.
If you don’t fall under the jurisdiction of this new regulation, that doesn’t mean that you shouldn’t be looking to follow suit. First of all, this is a great way to standardize an approach to address what is a very important issue. Secondly, the reality is that more legislation is coming. We can guarantee that the legislative eyes of the country are all on California’s Bill and the resulting effects on leveling pay disparity. Just recently Massachusetts introduced a bill with a similar feel.
The reality is that whether you are legally required to or not, you should be looking at better ways to manage your people and pay data. At a minimum, you should be setting benchmarks to help you craft goals around creating greater pay equity.
Learn more about Decusoft’s solution to manage, measure and report pay data: Compose Analytics.
