California: ALL Employers Must Read – Pay Transparency Requirements

On September 27, 2022, Governor Newsom signed SB 1162 21 (67.7%) into law that imposes new pay transparency requirements on employers depending on their size.

Currently, all employers are required to provide an applicant with a “pay scale” for a position upon request if the applicant had an initial interview. Pay scale is defined as the “salary or hourly wage range that the employer reasonably expects to pay for the position.”

Come January 1, 2023, there will no longer be a requirement that the applicant complete an initial interview before requesting a pay scale. The following additional pay transparency requirements go into effect on January 1:

• All employers must, upon request, provide an employee with the pay scale for the employee’s current position.
• All employers are required to “maintain records of a job title and wage rate history for each employee for the duration of the employment plus three years after the end of the employment” and make these available for inspection by the Labor Commissioner if requested.
• Employers with 15 or more employees must include a pay scale in a job posting. If an employer uses a third party to announce, post, publish, or otherwise make a job post known, it must provide the third party with the pay scale for the job advertisement.
• Employers with 100 or more employees, including employers who have 100 or more employees hired through a labor contractor, must make certain pay data reports to the State by the second Wednesday of May 2023, and annually thereafter. These reports include, in part, a breakdown of the number of employees by race, ethnicity, and sex in each of ten job categories. Beginning in 2023, such information will now also include the mean and median hourly pay rate for the employees. Reports can be submitted through the State’s online portal.

At Payroll People, we are on top of this update and will provide specific details regarding programming soon. We are working with our software vendors and will keep you apprised.

-Source: ePlace Inc.

Year-End Packets are Coming Soon

You can expect your year-end packet around the end of October. Keep an eye out for your packet and start filling it out as soon as possible to avoid delays.

Don’t Let Worker Classification Scare You!

Classifying employees correctly is a must for any business owner or manager. When determining the status of an employee, make sure to look at whether they’re providing services as an employee or an independent contractor.

An employee performs services that the business can control, including what and how things will be done. The key differentiator is that the business has the right to control the details of how an employee performs services.

By contrast, an independent contractor may offer their services to the public and has more control over the way they perform those services for a particular business. Misclassification, whether intention or accidental, can affect both the individual (employee or independent contractor) and the business. Tax issues often come out of this situation, so it’s important to assess each individual and classify them accordingly.

IRS Tax Tip 2022-117 offers additional insights into classifying workers and how businesses can avoid the issues that result from misclassification.

Training Classes

Our ACA classes are back! Contact your customer service rep to register.