Pay Data Reporting


Under California legislation enacted on September 30, 2020 (Senate Bill 973) large employers must report certain pay and other data to the Department of Fair Employment and Housing (DFEH) by March 31, 2021 and annually thereafter. DFEH anticipates rolling out a secure online reporting system in advance of the 2021 filing deadline. DFEH will be regularly updating this webpage with guidance. Please write to paydata.reporting@dfeh.ca.gov to pose additional questions not answered below.

I. INTRODUCTION

Why does California require large employers to report pay data to DFEH?

(11/02/2020) In SB 973, the California Legislature required employers of 100 or more employees to report to DFEH pay and hours-worked data by job category and by sex, race, and ethnicity (hereinafter “pay data”). In enacting this legislation, the Legislature found that “[d]espite significant progress made in California in recent years to strengthen California’s equal pay laws, the gender pay gap persists, resulting in billions of dollars in lost wages for women each year in California. Pay discrimination is not just a women’s issue, but also harms families and the state’s economy. In California, in 2016, women working full time, year round made a median 88 cents to every dollar earned by men, and for women of color, that gap is far worse. Although there are legitimate and lawful reasons for paying some employees more than others, pay discrimination continues to exist, is often ‘hidden from sight,’ and can be the result of unconscious biases or historic inequities.”

By creating a system by which large employers report pay data annually to DFEH, the Legislature sought to encourage these employers to assess themselves pay disparities along gendered, racial, and ethnic lines in their workforce and promote voluntary compliance with equal pay and anti-discrimination laws. In addition, SB 973 authorized DFEH to enforce the Equal Pay Act (Labor Code section 1197.5), which prohibits unjustified pay disparities. The Fair Employment and Housing Act (Gov. Code § 12940 et seq.), already enforced by DFEH, prohibits pay discrimination. Employers’ pay data reports will allow DFEH to more efficiently identify wage patterns and allow for effective enforcement of equal pay or anti-discrimination laws, when appropriate. DFEH’s strategic vision is a California free of discrimination.

Where is California’s pay data reporting requirement codified in law?

(11/02/2020) The pay data reporting requirement is contained in Government Code section 12999. In addition, the DFEH intends to issue regulations implementing this statute consistent with DFEH’s existing regulations (California Code of Regulations, Title 2, Division 4.1).

Will an employer’s pay data be publicly available?

(11/02/2020) Government Code 12999(i) prohibits DFEH, the Division of Labor Standards Enforcement (DLSE), and their staff from making “public in any manner whatever any individually identifiable information obtained pursuant to their authority under this section prior to the institution of an investigation or enforcement proceeding by [DFEH and/or DLSE] under Section 1197.5 of the Labor Code or Section 12940 involving that information, and only to the extent necessary for purposes of the enforcement proceeding. For the purposes of this section, ‘individually identifiable information’ means data submitted pursuant to this section that is associated with a specific person or business.”

In addition, Government Code section 12999(j) provides that “any individually identifiable information” (defined above) submitted to DFEH shall be considered confidential information and not subject to disclosure pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1).”

May DFEH publish reports based on data aggregated from multiple employers?

(11/02/2020) Pursuant to Government Code section 12999(k), “[DFEH] may develop, publish on an annual basis, and publicize aggregate reports based on the data obtained pursuant to their authority under this section, provided that the aggregate reports are reasonably calculated to prevent the association of any data with any individual business or person.”

How long will DFEH keep employers’ pay data?

(11/02/2020) DFEH “shall maintain pay data reports for not less than 10 years.” Gov. Code § 12999(l).

How will DFEH keep the data submitted by employers secure?

(11/02/2020) DFEH is committed to ensuring that the pay data reporting system is secure. When that system is rolled out publicly, DFEH will provide additional information in response to this question.

Does the federal government already collect pay data from large employers?

(11/02/2020) In SB 973, the California Legislature explained: “Recognizing that pay discrimination is difficult to detect and address, the Obama Administration announced a proposed revision to the Employer Information Report (EEO-1) to include the reporting of pay data by gender, race, and ethnicity beginning in 2018. However, in August 2017, the Trump Administration put a halt to the implementation of this new rule.” Following a federal court ruling, the U.S. Equal Employment Opportunity Commission (EEOC) was ordered to and did collect these data for 2017 and 2018. Since then, the EEOC has stopped collecting these data.

II. FILING REQUIREMENTS

Will DFEH’s pay data reporting system be similar to the one used by the EEOC to collect EEO-1 Component 2 data?

(11/02/2020) To ease reporting by employers, DFEH is endeavoring to create a system that closely resembles the EEOC’s system to the extent permitted by state statute.

What is the deadline for employers to submit their pay data report(s) to DFEH?

(11/02/2020) Under Government Code section 12999(a), employers must submit their pay data reports to DFEH on or before March 31, 2021, and then on or before March 31 each year thereafter.

How do employers submit their pay data reports to DFEH?

(11/02/2020) SB 973 was enacted on September 30, 2020. DFEH is in the process of securing an independent contractor to provide the necessary IT infrastructure, including an employer submission portal on DFEH’s website. DFEH has notified several potential vendors with valid Information Technology Master Service Agreements with the State of California via a Request for Offer on October 27, 2020. Offers are due to DFEH by November 10, 2020 by 5:00 p.m. PT. DFEH anticipates that this portal will be available in advance of the March 31, 2021 filing deadline.

Are there standard forms that employers should use to submit their pay reports to DFEH?

(11/02/2020) DFEH intends to issue standard forms for employers to submit their pay data reports.

Must employers submit their pay data reports in a particular electronic file format?

(11/02/2020) Government Code section 12999(f) requires that “[t]he information required by this section shall be made available in a format that allows the department to search and sort the information using readily available software.” For example, a comma-separated values (CSV) file is permissible but an image file is not permissible.

What are the penalties for employers who fail to file?

(11/02/2020) “If [DFEH] does not receive the required report from an employer, the department may seek an order requiring the employer to comply with these requirements and shall be entitled to recover the costs associated with seeking the order for compliance.” Gov. Code § 12999(h).

III. REQUIRED CONTENT

What is the “Reporting Year”?

(11/23/2020) A pay data report shall “cover[] the prior calendar year, which, for purposes of this section, shall be referred to as the ‘Reporting Year.’” Gov. Code § 12999(a). For example, a pay data report submitted to DFEH in 2021 will cover calendar year 2020; 2020 is the Reporting Year.

What is the “Snapshot Period”?

(11/23/2020) The “Snapshot Period” is a single pay period between October 1 and December 31 of the Reporting Year. Gov. Code § 12999(b)(3). Employers are free to choose the single pay period between October 1 and December 31 of the Reporting Year that will serve as their Snapshot Period. As explained more below, the Snapshot Period is used to by employers to identify the employees to be reported on in a pay data report submitted to DFEH. See Gov. Code §§ 12999(b)(3) & 12999(b)(4).

Which employers are required to submit pay data reports to DFEH?

(11/23/2020) Under Government Code section 12999(a), “a private employer that has 100 or more employees and who is required to file an annual Employer Information Report (EEO-1) pursuant to federal law shall submit a pay data report to” DFEH. An employee is “an individual on an employer’s payroll, including a part-time individual, whom the employer is required to include in an EEO-1 Report and for whom the employer is required to withhold federal social security taxes from that individual’s wages.” Gov. Code § 12999(m)(1).

An employer has the requisite number of employees if the employer either employed 100 or more employees in the Snapshot Period chosen by the employer or regularly employed 100 or more employees during the Reporting Year. “Regularly employed 100 or more employees during the Reporting Year” means employed 100 or more individuals on a regular basis during the Reporting Year. “Regular basis” refers to the nature of a business that is recurring, rather than constant. See Cal. Code Regs., tit. 2, §§ 11008(d)(1) & 11008(d)(1)(A). For example, in an industry that typically has a three-month season during a calendar year, an employer that employed 100 or more employees during that season regularly employed the requisite number of employees and would be required to file a pay data report to DFEH, if the employer is also required to file an EEO-1 Report.

Employees located inside and outside of California are counted when determining whether an employer has 100 or more employees. See Cal. Code Regs., tit. 2, § 11008(d)(1)(C). For example, an employer that had 50 employees inside California and 50 employees outside of California during the Reporting Year would be required to submit a pay data report to DFEH. An employer with no employees in California during the Reporting Year would not be required to file a pay data report with DFEH.

Part-time employees, including those who work partial days and fewer than each day of the work week, are counted the same as full-time employees. For example, for counting purposes, an employer has 100 employees when 60 individuals work every day and 40 individuals work alternate days to fill 20 positions, and there are no more than 80 individuals working on any working day. Employees on paid or unpaid leave, including California Family Rights Act (CFRA) leave, pregnancy leave, disciplinary suspension, or any other employer-approved leave of absence, are counted. See Cal. Code Regs., tit. 2, § 11008(d)(1)(B).

Consistent with federal EEO-1 filing requirements, an employer with fewer than 100 employees is required to file with DFEH “if the company is owned or affiliated with another company, or there is centralized ownership, control or management (such as central control of personnel policies and labor relations) so that the group legally constitutes a single enterprise, and the entire enterprise employs a total of 100 or more employees.” View EE0-1 Instruction Booklet.

When determining whether an employer has 100 or more employees, does the employer count temporary workers provided by a staffing agency or independent contractors?

(11/23/2020). For purposes of pay data reporting to DFEH, Government Code section 12999(m)(1) defines “employee” to mean “an individual on an employer’s payroll, including a part-time individual, whom the employer is required to include in an EEO-1 Report and for whom the employer is required to withhold federal social security taxes from that individual’s wages.” If any temporary worker provided by a staffing agency or any independent contractor meets this definition of “employee,” then that individual is counted.

Are there different types of pay data reports?

(11/23/2020) There are two types of pay data reports: establishment reports and consolidated reports. An employer that has a single establishment will submit to DFEH one pay data report covering all employees. An employer that has multiple establishments will submit to DFEH one pay data report for each establishment and one consolidated report. Gov. Code § 12999(d). “Establishment” is defined as “an economic unit producing goods or services.” Gov. Code § 12999(m)(2). An employer’s headquarters is an establishment for the purposes of pay data reporting to DFEH.

What information must be contained in a pay data report?

(11/23/2020) DFEH is currently developing a sample report form and a submission portal that will specify the required information, which includes but may not be limited to:

  1. The number of employees by race, ethnicity, and sex in each of the following ten job categories: Executive or senior level officials and managers; First or mid-level officials and managers; Professionals; Technicians; Sales workers; Administrative support workers; Craft workers; Operatives; Laborers and helpers; and Service workers. For purposes of establishing the numbers required to be reported under this paragraph (1), an employer shall create a “Snapshot” that tabulates the number of the individuals in each job category by race, ethnicity, and sex, employed during the Snapshot Period (see previous FAQ “What is the Snapshot Period?”).
  2. The number of employees by race, ethnicity, and sex, whose annual earnings fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey. For purposes of establishing the numbers to be reported under this paragraph (2), the employer shall identify the total earnings during the Reporting Year, as shown on the Internal Revenue Service Form W-2, for each employee in the Snapshot, regardless of whether the employee worked for the full calendar year. The employer shall tabulate and report the number of employees whose W-2 earnings during the Reporting Year fell within each pay band.
  3. The total number of hours worked by each employee counted in each pay band during the Reporting Year.
  4. The Reporting Year, the dates of the Snapshot Period selected by the employer, the report type (establishment report or consolidated report), and the total number of reports being submitted by the employer.
  5. The employer’s name, address, headquarters’ address (if different), Employer Identification Number, North American Industry Classification System (NAICS) code, Duns and Bradstreet number, number of employees inside and outside of California, number of establishments inside and outside of California, and whether the employer is a California state contractor. If applicable, the name and address of the employer’s parent company or parent companies.
  6. For a multiple-establishment employer’s establishment reports, the establishment’s name, address, number of employees, and major activity.
  7. For a multiple-establishment employer’s consolidated report, the names and addresses of the establishments covered by the consolidated report.
  8. Any clarifying remarks.
  9. A certification that the information contained in the pay data report is accurate and prepared in accordance with Government Code section 12999 and DFEH’s instructions, and the name, title, signature, and date of signature of the certifying official.
  10. The name, title, address, phone number, and email address of someone who can be contacted about the report.

Should an employer’s pay data report only include their California employees or all employees?

(11/23/2020) As explained above, an employer is required to file a pay data report with DFEH if the employer has 100 or more employees (inside and outside of California), is required to file an EEO-1 report, and has at least one employee in California. See previous FAQ “Which employers are required to submit pay data reports to DFEH?”

When reporting to DFEH, employers must include their employees assigned to California establishments and/or working within California, and employers may include their other employers. Thus, DFEH expects that a single-establishment employer in California will include on its pay data report all employees (including any employees outside of California) whether or not teleworking.

Similarly, DFEH expects that a multiple-establishment employer with establishments only in California will include across its establishment reports and in its consolidated report all employees (including any employees outside of California) whether or not teleworking.

For multiple-establishment employers with establishments inside and outside of California, the employer: (A) must report to DFEH on its California establishments, all of its employees assigned to those establishments (including any employees outside of California) whether or not teleworking, and any other California employee (including those teleworking from California but assigned to an establishment outside of California); and (B) may report to DFEH on its establishments and employees not covered by (A). The employer’s consolidated report must include the establishments and employees under (A) and may include the establishments and employees under (B). DFEH is providing employers with these options because one option may be less burdensome for employers than the other in light of federal EEO-1 reporting.

For example, if an employer has one establishment in California with 50 employees (with three workers telecommuting from Nevada during the Snapshot Period) and one establishment in Nevada with 50 employees (with three workers telecommuting from California during the Snapshot Period), the employer would submit (1) an establishment report for their California establishment that covers all 50 employees, including those teleworking from Nevada; (2) an establishment report for their Nevada establishment that covers either only the employees teleworking from California or all 50 employees assigned to the Nevada establishment; and (3) a consolidated report that includes either all 53 employees in/assigned to California or all 100 employees.

If employees telework from a residence outside of California, but are assigned to an establishment in California, should they be included on the pay data report?

(11/23/2020) Yes. See previous FAQ “Should an employer’s pay data report only include their California employees or all employees?”

If employees telework from a residence in California, but are assigned to an establishment outside of California, should they be included on the pay data report?

(11/23/2020) Yes. Employers should report such employees on an establishment report that covers either only those employees teleworking from California and who are assigned to a single establishment outside of California or all employees assigned to that establishment outside of California. DFEH is providing employers with these options because one option may be less burdensome for employers than the other in light of EEO-1 reporting.

For example, if an employer has 100 employees assigned to an establishment in Oregon (five of whom are teleworking from California during the Snapshot Period) and 100 employees assigned to an establishment in Arizona (five of whom are teleworking from California during the Snapshot Period), the employer would submit (1) an establishment report for the Oregon establishment that covers either the five employees teleworking from California or all 100 employees at the establishment; (2) an establishment report for the Arizona establishment that covers either the five employees teleworking from California or all 100 employees at the establishment; and (3) a consolidated report that covers all ten employees teleworking from California or all 200 employees.

Should employees assigned to an establishment in California but who work at client sites outside of California be included in the employer’s pay data report?

(11/23/2020) Yes. Please see previous FAQ “Should an employer’s pay data report only include their California employees or all employees?”

Must employers report on employees who were employed during the Snapshot Period even if they were no longer active employees by December 31st of the Reporting Year?

(11/23/2020) Yes. Even if an employee resigned or was terminated before December 31 of the Reporting Year, the employee should be reported on if the employee was employed during the Snapshot Period.

How should employers assign employees to a job category?

(11/23/2020) Employers should assign each employee to one of the ten job categories listed above and in Government Code section 12999(b)(1). All jobs are considered as belonging in one of these ten categories. For consistency with federal EEO-1 reporting, employers should follow the EEO-1 Instruction Booklet.

Which pay bands should an employer use?

(11/23/2020) Even though California has a higher minimum wage than is established under federal law, employers’ pay data reports must utilize the pay bands established by the U.S. Bureau of Labor Statistics (BLS) in the Occupational Employment Statistics survey, which currently are:

  1. $19,239 and under
  2. $19,240 – $24,439
  3. $24,440 – $30,679
  4. $30,680 – $38,999
  5. $39,000 – $49,919
  6. $49,920 – $62,919
  7. $62,920 – $80,079
  8. $80,080 – $101,919
  9. $101,920 – $128,959
  10. $128,960 – $163,799
  11. $163,800 – $207,999
  12. $208,000 and over

How should employers report employees’ race and ethnicity?

(11/23/2020) For consistency with federal EEO-1 reporting, employers should follow the EEOC’s instructions for race and ethnicity identification available in the EEO-1 Instruction Booklet.

How should employers reports employees’ sex?

(11/23/2020) Under the Gender Recognition Act of 2017 (Senate Bill 179), California officially recognizes three genders: female, male, and nonbinary. Therefore, employers should report employees’ sex according to these three categories. Employee self-identification is the preferred method of identifying sex information. Unlike the EEO-1 Component 2 data collection from 2017 and 2018, DFEH anticipates that its sample form and instructions will require employers to report non-binary employees in the same manner as male and female employees.

May an employer submit a federal EEO-1 Report to DFEH to satisfy its obligation under Government Code section 12999?

(11/23/2020) Yes, but only if the EEO-1 Report “contain[s] the same or substantially similar pay data information required” by Government Code section 12999. Government Code section 12999(g).

IV. PAY

Guidance coming soon

V. HOURS WORKED

Guidance coming soon

VI. MULTI-ESTABLISHMENT EMPLOYERS

Guidance coming soon

VII. ACQUISITIONS AND MERGERS

Guidance coming soon

VIII. SPINOFFS

Guidance coming soon


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California's Relay Service at 711 | contact.center@dfeh.ca.gov