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California Payroll Transparency Law – One Month In

Posted February 2, 2023February 15th, 2024by No Comments

It’s been a month since the California Payroll Transparency Law (SB 1162) went into effect. You ensured that on January 1, your company complied with the statute by creating salary ranges and posting the information on job postings.

While you prepared for the law to go into effect, were you prepared for the overwhelming number of employees requesting their salary information and taking more hours than expected from your Human Resources team?

To address the challenges your team is undoubtedly facing, the following procedures may help your company stay organized and address employee queries in order to comply with the new law.

1.   If you haven’t already done so, train your Human Resources employees about the new law.

                   •   Ensure they understand the minimum requirements for responding to employee requests for salary information.

        •   Clarify what salary requirements do not need to be disclosed.

        •   Establish a method of keeping the information up-to-date and who has access to the data.

2.   Establish a clear protocol for employees to follow when requesting salary information.

        •   Work with IT to create an email address where employees may submit salary requests so one person is responsible for addressing the requests.

3.   Determine the process for disclosing the requested information, such as by in-person or virtual meeting, internal electronic communication or otherwise. Note that a meeting is strongly recommended in order to allow discussion and to convey appropriate context regarding the disclosed salary information.

4.   Promptly acknowledge receipt of an employee’s request for salary information and inform the employee when such information will be provided and the manner in which it will be conveyed.

5.   Determine who from the company will be part of the meetings, including whether more than one HR representative will be present, if appropriate for the size of your company.

6.   Determine whether the HR Representative will take notes and if so, what should be documented, such as the next steps and time commitment for follow-up, and whether the employee’s supervisor will be notified or involved in future discussions.

7.   Determine a standard initial meeting session ranging from 15-30 minutes and whether standard time will vary based on the employee’s role and the number of other employees holding a similar role or title.

8.   Write a best-practices procedural document as a step-by-step guide to help your HR Team respond to email queries.

The suggested procedural guide should include:

1.   email verbiage to acknowledge an employee’s request for salary information;

2.   email verbiage to set up an appointment to meet with the employee;

3.   email verbiage with meeting invite, including length of meeting, attendees, confidentiality, and what will and won’t be discussed;

4.   an agenda for HR representatives to follow during the meeting;

5.   designation of who is responsible for obtaining/compiling the salary information for the meeting;

6.   details regarding how the salary information should be obtained the information, including whether the information is maintained on a shared spreadsheet;

7.   protocols for the information the HR Reps should include in the employee’s file or the HR file regarding any request for salary information – remember that the company cannot demonstrate any form of retaliation against an employee requesting salary information;

8.   discussion of the next procedural steps if an employee is outside of the range for the employee’s position/job title; and

8.   determination of next steps if the employee does not believe he or she is paid fairly after receiving the salary information.

Even with the best intentions, disclosure of salary information may create ripples in your organization and lead to employee discontent and turnover.  Employers need to be prepared for this and respond appropriately and lawfully.

Remember, the new law is in place to provide transparency to assure your employees that they are being paid fairly and without discrimination toward any protected class. If you are paying your employees fairly and equitably, and are prepared for employee salary information requests, there is no reason to fear the new law.