Attention California Employers! New Guidance for Complying with Expanded Pay Data Reporting Requirements

Effective this year, Senate Bill 1162 significantly expanded the employer pay data reporting requirements of California Government Code section 12999.  The California Civil Rights Department (CRD) recently released guidance to help employers comply with the new requirements by the upcoming May 10 deadline.

Here is what California employers need to know:

• Who: The pay data reporting requirements apply to California private employers of 100 or more employees and/or 100 or more workers hired through labor contractors.
  • Notably, this includes employers that have 100 or more employees nationwide, even if only one employee is in California.
  • Employers must include pay data on all employees working within California (even if assigned to an establishment outside of California) as well as all employees assigned to California establishments (even if working from outside of California).
  • Employers that meet this threshold must provide pay data to California regardless of whether they are also required to file an annual EEO-1 Report pursuant to federal law. Gov. Code § 12999(a).

• What: Employers must annually submit a Payroll Employee Report and/or Labor Contractor Employee Report to the CRD containing pay and hours-worked data by establishment, job category, sex, race, and ethnicity.

• When: The deadline for filing Reports is the second Wednesday of May each year. For Reports covering Reporting Year 2022, the filing deadline is May 10, 2023.
  • Employers who fail to file required Reports may face penalties of $100 per employee. The penalties increase to $200 per employee for a subsequent failure to file a required Report.

• Where: Employers must register with the CRD’s Pay Data Reporting Portal and then create and submit its Payroll Employee Report and/or Labor Contractor Employee Report. The Portal, 2022 templates, instructions, a User Guide, and FAQs are available at https://pdr.calcivilrights.ca.gov/s/

• How: The following is the CRD’s basic overview of the process for submitting Reports:

1. Determine whether the employer is required to file a Payroll Employee Report for Reporting Year 2022. If the employer is required to file, proceed through the following steps.
2. Determine the employer’s “Snapshot Period” to identify the employees who will be reported on. Employees assigned to California establishments and/or who work from California must be reported on.
3. Determine which establishments the employer has and gather information about each establishment.
4. For all employees in the Snapshot Period, identify each employee’s establishment, job category, race/ethnicity, sex, pay, pay band, and hours worked.
5. Within each establishment, group employees who have the same job category, pay band, and race/ethnicity/sex combination. Some groups may be a group of one if no other employee in the establishment shares that employee’s job category, pay band, race/ethnicity, and sex.
6. Within each employee group in each establishment, calculate the total hours worked by the group.
7. Within each employee group in each establishment, calculate the group’s mean hourly rate and the group’s median hourly rate.
8. Gather additional information about the employer and its establishments, such as the employer’s address on file with the California Employment Development Department (EDD), total number of employees in the United States, total number of employees in California, Federal Employer Identification Number (FEIN), California Employer Identification Number (SEIN), North American Industry Classification System (NAICS) code(s), DUNS Number, and whether the employer is a state contractor.
9. Register in the portal and build the report. First, in the portal, provide information about the employer and, if relevant, its parent company, as well as information on all affiliated entities included in the report (Employer Info and Submission Info). Next, provide establishment-level and employee-level information (Establishment and Employee Details) by uploading an Excel file, by using CRD’s template, uploading a .CSV file, or using the portal’s fillable forms.
10. Provide any clarifying remarks in the relevant field(s) and correct any errors identified by the portal.
11. Certify the final report and submit by May 10, 2023. 

• Why: The California Legislature seeks to draw employers’ attention to persisting pay disparities along gendered, racial, and ethnic lines and promote voluntary compliance with equal pay and anti-discrimination laws. Individual employer’s pay data will not be made publicly available.

Employers are encouraged to thoroughly review the CRD’s FAQs and instructions within the Portal, and give themselves ample time to complete their pay data reports by the May 10, 2023 deadline.

If you have questions or need assistance completing your pay data reports, please contact Cecilia Nieto at cecilia@burnsbarton.com, or your favorite BurnsBarton attorney.