|California now requires employers to collect and report pay data as part of the State’s efforts to eradicate pay differences by gender and based upon race or ethnicity. The pay data reporting requirement is contained in Government Code section 12999. In addition, the California Department of Fair Employment and Housing (“DFEH”) intends to issue regulations implementing this statute consistent with the DFEH’s existing regulations (California Code of Regulations, Title 2, Division 4.1). Private employers with 100 or more United States employees who typically file an EEO-1 report must submit pay data to the DFEH no later than March 31, 2021. Here are the basics:
1. Who Must Report?
All private employers of 100 or more employees (with at least one employee in California) must report. All California employees must be included in the report, including full time, part time, temporary, and employees on leave. Employees located inside and outside of California are counted when determining whether an employer has 100 or more employees.
2. What is the Reporting Period? A pay data report submitted to DFEH in 2021 will contain pay and hours-worked data from calendar year 2020 for employees employed during the Snapshot Period; 2020 is the Reporting Year. The snapshot period to be reported is October 1, 2020 to December 31, 2020 for this cycle.
3. What is reported? Employers must report five categories of information: 1) Work Location, 2) Job Category, 3) Employee Gender, Race , Ethnicity, 4) Annual Pay, and 5) Annual Hours. This information can be compiled into a report on the online portal for the DFEH. The Work Location, for now, will be the same location as required by the form EEO-1. There are ten Job Categories to choose from, including everything from executive/senior level management to craft workers. Each employee included in the report must be given a Job Category. The Annual Pay Is broken down on the portal into twelve pay bands ranging from $19,239.00 and lower to $208,000.00 and higher. Each pay band includes a broad salary range, so only large pay differences among employees will be apparent. The total earnings for any one employee should be taken from W-2 wages at box 5. Annual Hours for non-exempt employees should be calculated using non-exempt timesheets and should include paid time off. Annual Hours for exempt employees should also be calculated from timesheets if possible and should be based upon average hours worked per day otherwise, including paid time off.
The DFEH link to prepare the template report is www.dfeh.ca.gov/paydatareporting. The site includes some FAQs that will likely be updated as the program rolls out. Employers are able to request a deferral for up to 30 days for lost records, severe economic hardship, or infrastructure/technology changes to the employer’s reporting system.
JoLynn M. Scharrer leads the Firm’s Employment Law Group, handling all aspects of labor and employment issues. She regularly advises clients on COVID-19 related issues, as well as drafting/revising employee handbooks, employment contracts, and other documents to comply with changing law. She conducts California mandated sexual harassment prevention training for employers with an interactive participatory program. She handles all aspects of monitoring and resolving employment claims and litigation, including but not limited to conducting complaint investigations, wrongful termination, discrimination, harassment and wage and hour issues. We are here to help with any questions or issues you face as an employer, either due to COVID-19 or any facet of your business. Please contact JoLynn Scharrer at firstname.lastname@example.org to discuss how our Employment Law Group can help.