Employers should note that a California pay data reporting law requires information to be sent to state officials starting in May 2023.
What is the California Pay Data Reporting Law?
Essentially, the law requires employers to provide a comparison of pay rates between different race/ethnicity and gender groups.
Applying to employers with 100 or more workers, the law requires companies to submit a pay data report, separate from an EEO-1, and include several pieces of information, primarily related to race, sex and ethnicity.
(The law also extends reporting requirements to cover contractor employees and requires labor contractors to provide the information to employers to meet reporting obligations.)
When does the California Pay Data Report need to be sent?
The report must be sent on or before the second Wednesday of May each year. This year, the law requires the information to be sent to the California Civil Rights Department on or before May 10, 2023.
What must the California Pay Data Report include?
The California pay data reporting law must include:
- The number of employees by race, ethnicity and sex in each of the following job categories:
- Executive or senior level officials and managers
- First or mid-level officials and managers
- Sales workers
- Administrative support workers
- Craft workers
- Laborers and helpers
- Service workers
The report also must provide:
- The number of employees by race, ethnicity and sex whose annual earnings fall within each of the pay bands used by the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics survey
- The median and mean hourly rate — for each combination of race, ethnicity, and sex — within each job category
Additionally, employers must create a “snapshot” that tallies the individuals in each job category by race, ethnicity, and sex, employed during a single pay period of the employer’s choice between Oct. 1 and Dec. 31 of the “reporting year.”
What is the California Pay Data Reporting penalty?
Violations: Employers found in violation of California’s pay data reporting law can face fines for noncompliance. Find more information on the state legislature’s website.
Meanwhile, California has provided reporting resources for employers, which include:
- Pay data reporting portal
- User guide
- Excel templates
- CSV templates
- Pay data reporting results
- Pay data in the news
Pay Transparency Laws in California
Lastly, the law also has a pay transparency component. Learn more in our previous blog: California Pay Transparency Law Update.
As might be expected, California is at the forefront of employment law, this time with comprehensive pay data requirements.
But the legislation also includes pay transparency provisions, which are becoming more common in jurisdictions across the U.S. Check out our March 15, 2023, webinar, Clear as Mud: How to Comply with Pay Transparency Laws, for a in-depth look at the topic.
And for a broader look at pay transparency laws, read our updated Employment Law News post: Pay Transparency Laws.
Large employers with locations in California should prepare now for the new pay data reporting requirements.
Employers may want to review their employment information policies to ensure compliance with the new reporting obligations, as well as contracts and agreements with labor contractors and staffing agencies.