California Pay Data Reporting
Pay Data Reporting
What is the California Pay Data Reporting?
Enacted to promote pay equity and combat wage discrimination, this requirement targets employers with 100 or more employees and those required to file an EEO-1 report under federal law. The data collected includes wage information broken down by job category, gender, race, and ethnicity, enabling the state to analyze potential pay disparities and take appropriate actions to address them.
What's new for this year?
Mean & Median
Under Senate Bill 1162, employers are mandated to compute and report the mean and median hourly rate of their payroll employees and/or labor contractor employees. This must be done for each establishment and broken down by pay band, job category, race/ethnicity, and sex.
Labor Contracot Employee Reports
Previously only Payroll Employee Reports were required to be reported. Now employers must also report any Labor Contractor Employees if they hired more than 100 throughout the course of the year.
Labor Contractor Penalties
If a contractor does not provide the required information to the employer, the contractor could face penalties for not working together.
Who must file a Pay Data Report with Califnora?
For California Pay Data Reporting, private employers must file if they meet the following criteria:
- Employment Size: Employers who have 100 or more employees, including full-time, part-time, and temporary employees.
- Federal Reporting Obligations: Employers who are required to file an annual Employer Information Report (EEO-1) under federal law.
- Doing Business in California: Employers with at least one employee in California and who meet the above criteria are subject to the reporting requirement.
Will California release employer Pay Data Information?
According to Government Code section 12999, the only exception is that the Labor Commissioner’s Office/DLSE, CRD, and their staff are forbidden from publicly disclosing any individually identifiable information acquired under their authority before initiating an investigation or enforcement action under Section 1197.5 of the Labor Code or Section 12940 of the Government Code. This can only be done to the extent needed for the enforcement proceeding. Individually identifiable information refers to data associated with a particular person or business, submitted as per this section.
In addition, Government Code section 12999(h) states that any individually identifiable information provided to CRD is deemed confidential and not subject to release under the California Public Records Act (Division 10, commencing with Section 7920.000 of Title 1).
How long will the California Civil Rights Department (CRD) keep records?
The CRD will maintain employer records for no less than ten years.
When is the deadline to submit Pay Data Reports?
According to Government Code section 12999(a), the due date for submitting pay data reports to CRD falls on the second Wednesday of May every year. Specifically, the deadline for reports concerning Reporting Year 2023 is May 10th, 2024.
Should the California Civil Rights Department (CRD) not receive the necessary report by the due date, it has the authority to pursue a court order compelling the employer to adhere to the state's pay data reporting regulations. In this case, CRD may recoup costs related to obtaining the compliance order, and the court might levy a civil penalty against the employer or labor contractor that did not promptly submit the required pay data. This is underlined in Gov. Code § 12999(f).
With the introduction of a new provision requiring employers to file Labor Contractor Employee Reports on their employees hired via labor contractors, CRD may consider deferring the request for a compliance order if a Labor Contractor Employee Report is filed after the May 10, 2024 deadline. This deferral may extend to as late as Monday, July 10th, 2024.
Are employers able to request an extension?
Starting from April 18, 2023, if an employer wishes to request an enforcement deferral period for a Labor Contractor Employee Report, they must register on the portal and complete and submit the required form by May 10, 2023. CRD will exclusively accept requests submitted through this portal, disregarding submissions made through alternative methods such as email or phone. Furthermore, CRD will not entertain requests submitted by third parties on an employer's behalf, including Professional Employer Organizations (PEOs). Only the employer itself may file the request, and any approved enforcement deferral period will be applicable solely to that specific employer.
What are the penalties for employers that fail to file?
With the enactment of Senate Bill 1162, additional penalties have been introduced for employers who neglect to submit required pay data reports. The Department possesses the authority to seek a court order compelling an employer, who was obliged to file a report but failed to do so, to submit the necessary report. Moreover, the Department can levy civil penalties of $100 per employee against an employer for failing to file a required report, with these penalties doubling to $200 per employee if there's a subsequent failure. Labor contractors failing to provide mandatory pay data to a client employer can also be assessed with these penalties. In addition to these fines, the Department has the right to recoup its expenses incurred in any enforcement action, as outlined in Gov. Code § 12999(f).
What are the different types of Pay Data Reports?
Currently there are two different types of California Pay Data Reporting. These include:
- Payroll Employee Reports
- Labor Contractor Employee Reports
Import
E-file
Done
What is a Snapshot Period and how do employers pick one?
The "Snapshot Period" refers to a specific pay period falling between October 1 and December 31 of the Reporting Year, as defined in Gov. Code § 12999(b)(4). Employers have the flexibility to select any single pay period within this range to serve as their Snapshot Period. This period is utilized by employers to identify the employees to be included in the pay data report submitted to CRD, as detailed in Gov. Code §§ 12999(b)(4) & 12999(b)(5).
Some employers, particularly those with varying pay periods (such as bi-weekly or monthly payments), have sought guidance on selecting their Snapshot Period. Understanding the purpose of this period is crucial. The Snapshot Period is solely used to pinpoint the payroll employees who must be included in the Payroll Employee Report. As the workforce may change throughout the year, an employer must choose a consistent time frame to identify the relevant employees. It's worth noting that an employee's inclusion is not determined by whether they were paid during the Snapshot Period, but rather if they were employed during that time.
What if an employee from the Snapshot Period did not work the full period. Should that employee still be included in the report?
Yes, that employee would still need to be included. This would be the same if the employee fell under these categories as well:
- Hired
- Resigned
- Terminated
If employees telework from a residence outside of California, but are assigned to an establishment in California, should they be included on the pay data report?
Yes, these employees could still be classifed as California employees and therefore, must be included in the Pay Data Report.
If an employee lives in California but physically works at an establishment outside of California, does the employer need to report that employee?
An employee must be included in the pay data report only if they also work in California. For instance, an employee who regularly teleworks from California must be reported.
How do I determine an establishment's Major Activity?
As part of their pay data reports, employers must provide details about each establishment's major activity. This information should be descriptive enough to recognize the specific industry and the product manufactured or service offered. In instances where an establishment is involved in multiple activities, the description should focus on the activity employing the highest number of workers. For guidance in outlining major activities, employers may refer to the North American Industry Classification System (NAICS).
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