With the May 10, 2023, deadline for California employers to submit their pay data reports under the updated SB-1162, some are struggling to obtain the data from their applicant tracking system or accounting software in the required format dictated by the new pay transparency law. But, for SmartSearch customers, this task is easier than most.
These updates to California’s pay transparency law have two major areas of concern. First is how pay range information is disclosed to potential candidates and current employees. The second is how this pay range data is reported to the state.
All California employers with 15 or more employees are required to submit reporting by May 10th, 2023, which must include the following information:
A. Executive and senior-level officials and managers.
B. First or mid-level officials and managers.
E. Sales workers.
F. Administrative support workers.
G. Craft workers.
I. Laborers and helpers.
J. Service workers.
2. The number of employees by race, ethnicity, and sex whose annual earnings fall within each pay band used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey.
3. Within each job category, for each combination of race, ethnicity, and sex, the median and mean hourly rate.
4. For purposes of establishing the numbers required to be reported under paragraph (1), an employer shall create a “snapshot” that counts all of the individuals in each job category by race, ethnicity, and sex employed during a single pay period of the employer’s choice between October 1 and December 31 of the “Reporting Year.”
5. For purposes of establishing the numbers to be reported under paragraphs (2) and (3), the employer shall calculate the total earnings, as shown on the Internal Revenue Service Form W-2, for each employee in the “snapshot,” for the entire “Reporting Year,” regardless of whether or not an employee worked for the full calendar year. The employer shall tabulate and report the number of employees whose W-2 earnings during the “Reporting Year” fell within each pay band.
6. The employer shall include in the report the total number of hours worked by each employee counted in each pay band during the “Reporting Year.”
7. The report shall include the employer’s North American Industry Classification System (NAICS) code.
For companies that use SmartSearch’s ATS and Onboarding software with easy-to-use reporting features, this information can be readily available with very little notice as it stores any required data from the hiring process in a secure database.
The new law will require employers to submit these reports in March starting in 2024.
One of the easier pitfalls this legislation presents concerns the posting of pay ranges. As of January 2023 employers are required to include a pay scale with any job posting. If the employer doesn’t post a pay range with the job, any person can submit a complaint with the Labor Commissioner’s Office, which can carry a penalty from $100 to $10,000 per violation.
In addition, pay bands will also need to be present for current employees, with the employer responsible for removing any pay disparities that may exist once discovered.
SmartSearch Career Center users who post jobs for any state that requires pay transparency already may notice that if the job is in any of these states, the system defaults to requiring a pay range before posting. Helping recruiters avoid costly fines.
The goal of any pay transparency law is to reduce the presence of any racial or gender-based pay gaps that may exist at a state level. California is not the first state to enact legislation to combat these potential pay gaps.
Colorado was the first to launch similar requirements for employers in their state in 2019. Washington State was the next to follow, officially launching its reporting requirements in January 2023. New York State is currently attempting to establish similar pay transparency requirements.
As additional states seek to create their legislation for pay transparency, employers must consider how they review and publish information concerning their open jobs and how they collect and store information required for location-based compliance reporting.
Reporting is one of the cornerstones of SmartSearch’s All-In-One hiring platform, ensuring that all data, from advertising the opportunity to the new hire onboarding information, is collected and stored in a secure and accessible database. These data fields can be configured with your automation process to send reminders and make it easy for candidates and employees to self-declare.
With this data, users can schedule and export these compliance reports with the information required by different cities, counties, states, and countries.
If you’d like to speak to a specialist about how SmartSearch can help you comply with different pay transparency laws, click here to schedule a call. The May 10th deadline will be here before you know it.