California Senate Bill 1162: Pay Transparency and Pay Data Reporting—Statutory Duties for Employers in 2025

Introduction

California’s Senate Bill 1162 (“SB 1162”) codifies significant pay transparency and pay data reporting requirements for employers, shaping hiring practices, recordkeeping, and workplace equity efforts across the state. This article provides a statutory-based overview of SB 1162’s mandates, focusing on operative Labor Code and Government Code provisions in 2025.

I. Covered Employers

SB 1162 establishes two cornerstone duties:

  1. All employers with fifteen or more employees must include a “pay scale”—the salary or hourly wage range—in every job posting for positions that may be performed in California, including remote work. Cal. Lab. Code § 432.3(a)–(b).

  2. Private employers with one hundred or more employees, whether directly employed or via labor contractors, must file annual pay data reports with the California Civil Rights Department (“CRD”). Cal. Gov’t Code § 12999(a).

II. Pay Scale Disclosure

A. Job Postings

Effective January 1, 2023, every covered job posting must clearly state the applicable pay scale. This requirement applies to both employer-held and third-party listings and covers positions that could be filled in California regardless of working location. Cal. Lab. Code § 432.3(b).

B. Employee Requests

Employers must provide current employees with the pay scale for their own position upon request. Cal. Lab. Code § 432.3(c).

C. Recordkeeping

Employers are required to maintain job title and wage rate history records for each employee throughout employment and for three years post-separation. Failure to produce these records on request creates a rebuttable presumption in favor of the employee in any proceeding alleging noncompliance. Cal. Lab. Code § 432.3(e)–(f).

III. Pay Data Reporting

A. Annual Report Obligations

By the second Wednesday in May of each year, private employers with one hundred or more employees must submit a pay data report to the CRD, detailing workforce composition by race, ethnicity, and sex across job categories and pay bands, and including median/mean hourly rates. Cal. Gov’t Code § 12999(a)–(c).

B. Labor Contractor Employees

Employers must submit a separate report for employees supplied by labor contractors and ensure labor contractors provide all required data for reporting. Cal. Gov’t Code § 12999(b)(2)–(3).

C. No EEO-1 Substitution

Federal EEO-1 filings do not meet California’s pay data reporting requirements; employers must comply with CRD-specific procedures. Cal. Gov’t Code § 12999(d).

IV. Enforcement and Penalties

A. Civil Penalties

Employers failing to disclose pay scales, respond to employee requests, or maintain proper records are subject to civil penalties of $100 to $10,000 per violation, at the discretion of the Labor Commissioner. Cal. Lab. Code § 432.3(h).

B. Claims and Investigations

Employees have one year from discovery of a violation to file a claim. Cal. Lab. Code § 432.3(i). The Labor Commissioner and CRD may investigate potential violations and enforce record production requirements. Cal. Lab. Code § 432.3(e); Cal. Gov’t Code § 12999(g).

V. Best Practices for Employers

  • Audit all job postings to ensure pay scale inclusion and accuracy.

  • Maintain robust, up-to-date job title and wage history records to meet statutory retention obligations.

  • Train HR and recruiting staff on the requirements of SB 1162 and related regulations.

  • Institute clear internal processes for responding to employee pay scale requests and annual reporting.

  • Review and update agreements with labor contractors for data sharing and compliance cooperation.

VI. Conclusion

California SB 1162 sets a statutory mandate for transparent pay practices and workforce reporting that carries substantial regulatory, legal, and reputational consequences for noncompliance. Employers should review statutes—Cal. Lab. Code § 432.3 and Cal. Gov’t Code § 12999—and ensure policies, systems, and training are updated to meet current law.

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