California law requires employers with 100 or more U.S. employees to annually submit data on the pay, hours worked, and demographics of all employees who either work within California or who are assigned to a California establishment, even if they reside or telework from another state.
This data must be submitted every year to the California Civil Rights Department (CRD), formerly the Department of Fair Employment & Housing (DFEH). The purpose of this reporting is to (a) encourage employers to “self-assess” and correct any pay disparities that exist within their companies along gender, race, and/or ethnic lines, and (b) promote voluntary compliance with California’s equal pay and anti-discrimination laws.
SB 1162 Requires “Enhanced” Pay Data Reporting
As a result of new legislation (SB 1162) that took effect on January 1, 2023 (that we previously blogged about here), California employers with 100 or more U.S employees have new payroll data reporting obligations this year.
The New Reporting Date
The most critical change is the deadline change. Now, as a result of SB 1162, employers have until May 10, 2023 to report their payroll data to the CRD.
The New Reporting Obligation
To prepare a proper payroll report, employers must first assign each employee to his/her/their proper workplace – or “establishment,” as the regulations call it. Then, for each establishment that an employer has, the employer must gather each employee’s job category, race/ethnicity/sex, pay band, and hourly rate. Then, armed with this information, the employer reports to the CRD:
- The number of different job categories at each establishment.
- Within each job category, the number of employees who share the same pay band and the same race/ethnicity/sex within that job category.
- Within each such shared group, the group’s mean hourly rate of pay, median hourly rate of pay, and total work hours.
Failing to timely file this mandatory report subjects an employer to a civil penalty of $100 per employee for the first failure to file and $200 per employee for any subsequent failure to file.
Need More Information?
The CRD recently published new FAQs that explain how SB 1162 changed employers’ payroll data reporting obligations. You can find those FAQs here.
The CRD has also published a “User’s Guide” to help employers through the payroll data reporting process. You can find that here.
For more general pay data reporting information, including sample Excel and CSV reporting templates, visit the CRD’s Pay Data Reporting website here.
If this all sounds horrible – like the last thing you want deal with — contact us. We help employers with their pay data reporting obligations, and we can help you too.