CA Legislature Expands Pay Transparency and Data Reporting Requirements; Extends COVID Supplemental Paid Sick Leave

California employers should take note of two significant bills recently passed by the state Legislature that are now awaiting likely approval by Governor Newsom. The first, Senate Bill 1162 (SB 1162), would further expand California's already progressive requirements for employers regarding pay transparency and data reporting. The second, Assembly Bill 152 (AB 152), is expected to extend the state's current Covid-19 Supplemental Paid Sick Leave expiration date from September 30 to December 31, 2022.

SB 1162: Expanded Pay Transparency & Data Reporting Requirements

With the passage of SB 1162 on August 30, 2022, the state is one step closer to adopting new pay transparency and data reporting requirements. SB 1162, introduced by Senator Monique Limón of Santa Barbara in February 2022, reflects an ongoing trend by legislators nationwide to increase corporate transparency and accountability to reduce pay gaps and promote job quality and satisfaction. In 2017, California led the nation by passing the first mandatory pay transparency law, which required employers to provide pay scale information to job applicants upon reasonable request. Multiple states have since followed California's lead and passed similar laws. In some states, the pay transparency laws are even more expansive.

If signed into law by Governor Newsom, the current amended version of SB 1162 would increase employers' pay transparency obligations as follows: 1) upon request, all employers will be required to provide the pay scale (i.e., hourly rate or salary range) for the position in which the employee is currently employed; 2) employers will be required to maintain records of job title and wage rate history for all employees for the duration of employment plus three years; and 3) all employers with 15 or more employees will be required to disclose pay scales in all job postings.

SB 1162 also expands California employers' current pay data reporting requirements, which were initially passed into law in 2020 as part of the nation's first such state-imposed obligations. The current requirements mandate that private employers with 100 or more employees report annually the number of their employees by race, ethnicity, and sex in specified job categories to the Department of Fair Employment and Housing (recently renamed the Civil Rights Department (CRD)).

The changes to pay data reporting requirements proposed by the current amended version of SB 1162 include:

• The additional requirement that the pay data reports submitted by private employers with 100 or more employees to the CRD include the median and mean hourly rate of pay for each combination of race, ethnicity and sex within each category.
• The pay data report due date is changed from March 31 to the second Wednesday in May.
• Private employers with 100 or more employees hired through labor contractors must also submit a separate pay data report to the CRD.
• A California employer may not submit an Employment Information Report (EEO-1) in lieu of a pay data report.
• California employers with multiple establishments are no longer required to submit a consolidated report.
• Allows the implementation of penalty provisions for failure to file required pay data reports.
• Removes a provision in an earlier version of the bill that would have required the CRD to publish each employer's submitted pay reports on a public website.

Governor Newsom has until September 30, 2022 to sign or veto this bill, which, if approved, would become effective January 1, 2023. California employers should be aware that, under the new law, pay data reports would be due on the second Wednesday of May, which is May 10, 2023.

AB 152: COVID-19 Supplemental Paid Sick Leave Extension to December 31, 2022

If AB 152, which was passed by the California Legislature on August 31, 2022, is approved by Governor Newsom, California employers can expect a three-month extension of the COVID-19 Supplemental Paid Sick Leave (SPSL) requirements from its current expiration date of September 30 to December 31, 2022.

Under current law, employers with more than 25 employees must provide up to 40 hours of SPSL for covered employees unable to work or telework due to certain reasons related to COVID-19. A covered employee is entitled to an extra 40 hours of SPSL if the employee, or a family member for whom the employee provides care, tests positive for COVID-19. However, an employer does not have any obligation to provide additional SPSL if an employee refuses to provide documentation of test results. The existing law also authorizes the employer to require the covered employee, if that employee tests positive, to submit to another test on or after the fifth day after the positive test, at the employer's expense, and provide documentation of those results.

If signed into law, AB 152 would specify that an employer has no obligation to provide additional SPSL if the employee refuses to submit to the above-mentioned tests and provide documentation, as specified. Additionally, this bill would authorize the employer to require, if the diagnostic test is positive, the employee to submit to a second test within no less than 24 hours, all at the employer's expense. AB 152 would extend all of these provisions for three additional months, until December 31, 2022.

This new bill would also extend to December 31, 2022 the existing law that provides SPSL for specified in-home supportive service providers and waiver of personal care service providers who are unable to work due to certain reasons related to COVID-19.

Additionally, AB 152 would establish the California Small Business and Non-Profit COVID-19 Relief Grant Program to assist qualified small businesses (26 to 49 employees) or nonprofits that are incurring costs up to $50,000 for COVID-19 SPSL. If enacted, the bill would repeal these provisions on January 1, 2024.

As always, DWT will continue to monitor these issues and provide updates on these bills as they occur. In the meantime, if you have any questions about your company's compliance, please contact a member of the DWT Employment Services Group.

The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.

DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.