The California Civil Rights Department (“CRD”) has issued a revised User Guide, FAQs, Excel Templates, examples of data submissions, and other resources reflecting recent changes to California’s Pay Data Reporting Law (Government Code section 12999, as amended by SB 1162). You can access the updated information at: https://calcivilrights.ca.gov/paydatareporting/.

As we previously reported, SB 1162 amended and expanded the requirement that certain private employers submit pay data to the CRD. You can access our full alert regarding the new law here. The most significant changes – effective January 1, 2023 – include:

1. All employers with 100 or more employees, at least one of whom is located in California, must annually submit a Pay Data Report, and may not submit a federal EEO-1 Report in lieu of a Pay Data Report.
2. Employers with 100 or more employees hired through labor contractors (i.e., staffing agencies) must submit a separate Pay Data Report to the CRD.
3. These pay data reports are now required to include median and mean hourly pay rates for each combination of race, ethnicity, and sex within each job category.
4. There are new civil penalties for failure to file required reports ($100 or $200 per employee).
5. The deadline for submission is the second Wednesday in May. For the 2022 reporting year, reports are due on May 10, 2023.

The CRD website has been updated to include a new User Guide, templates, and examples. Some of the notable changes made to the FAQs include:

• Which Employees Should be Included: The CRD clarifies that while the reporting requirement applies to an employer with 100 or more employees, at least 1 of whom works in California, the report should only include employees assigned to California establishments and/or working within California. Unlike in years past, employers may not report on employees who work outside of California and are assigned to an establishment outside of California. The FAQs contain detailed examples about how to handle remote workers.
• Two Separate Types of Reports: The FAQs clarify that there are two separate types of reports: a Payroll Employee Report for payroll employees and a Labor Contractor Employee Report for workers hired through labor contractors.
  • The FAQs outline the differences between the reports and explain the circumstances under which an employer might need to submit one or both.
  • The website clarifies that each employer should submit a single Payroll Employee Report and/or a single Labor Contractor Employee Report, regardless of how many establishments the employer may have.
• New Labor Contractor Employee Reports: The FAQs provide new detailed information about Labor Contractor Employee Reports.
  • The FAQs clarify that a client employer has the requisite number of labor contractor employees if the employer either had 100 or more labor contractor employees in the Snapshot Period – across all of its labor contractors, not per labor contractor – or regularly had 100 or more labor contractor employees during the Reporting Year. (The Snapshot Period is a single pay period between October 1 and December 31 of the Reporting Year that is selected by the employer for purposes of identifying the employees who should be included in the report.)
  • The CRD further confirms that labor contractor employees located inside and outside of California are counted when determining whether an employer has 100 or more labor contractor employees.
  • The CRD makes recommendations for collaboration between the client employer and labor contractors to gather the requisite data.
  • The FAQs provide detailed examples for how to calculate total earnings for labor contractor employees who have worked for more than one client employer over the course of the calendar year.
• Data Calculations: The CRD provides detailed information regarding calculation of the new required mean and median data.

This is just a summary of some of the helpful new topics covered by the FAQs. If your company is required to report, or if you are unsure whether this new law applies to your company, you should carefully review the posted information. Please feel free to contact us if you have questions about compliance.

If you have questions about Pay Data Reporting or need advice about how to implement these new requirements, please contact us.

• Katie M. McCray (kmccray@wilsonturnerkosmo.com)
• Michael Kalt (mkalt@wilsonturnerkosmo.com)
• Emily J. Fox (efox@wilsonturnerkosmo.com)
• Lois M. Kosch (lkosch@wilsonturnerkosmo.com)

Wilson Turner Kosmo’s Special Alerts are intended to update our valued clients on significant employment law developments as they occur. This should not be considered legal advice.