CA Pay Data Reporting Deadline Approaching

At the end of the 2020 California legislative session, Governor Gavin Newsom passed Senate Bill 973, creating new requirements for private employers in the state with 100 or more employees. Employers in this same category are already required by federal law to file an annual Employer Information Report (EEO-1), but under this new law they must also submit a pay data report to the California Department of Fair Employment and Housing (DFEH) by March 31, 2021.

The California Pay Data Report has a few similarities to the federally-required EEO-1 survey – having employers use the same establishments as in the survey and follow the same Equal Employment Opportunity Commission (EEOC) guidance on job categorization, race, and ethnicity – but also some key differences.

Unlike the EEO-1 Component 2 data collection that occurred in 2019 (for calendar years 2017 and 2018), the California Pay Data Report requires that:

• Non-binary employees are reported in the same manner as male and female employees;
• An employee’s pay is reported from Box 5 of their W-2;
• An employee’s hours worked in 2020 includes any hours the employee was on any form of paid time off during which the employee was paid by the employer;
• Multiple-establishment employers report all establishments, including those with fewer than 50 employees, in the same manner by providing the number of employees and total hours worked for each employee group assigned to the establishment;
• Multiple-establishment employers do not report consolidated data

What Information Do Employers Need to Submit?

Employers are required to group employees by job category, pay band, race, ethnicity, and sex, and then report the number of employees within each group and the total hours worked by the employees in that group, as well as some additional information, to DFEH as a California Pay Data Report. (For employers with more than one establishment, employers must organize and report their data by establishment.)

Here is how employers can build their California Pay Data Report:

• Select a single pay period (“Snapshot Period”) between Oct. 1, 2020 and Dec. 31, 2020 to create a “Snapshot” of the employees at a given time in order to identify who must be reported on in the Pay Data Report. (All employees assigned to a California establishment and/or working within California during the chosen Snapshot Period must be included in the employer’s Pay Data Report.)
• Using the employees from the Snapshot Period, identify or calculate each employee’s:
  • Establishment;
  • Job category;
  • Race, ethnicity, and sex;
  • Earnings in the entirety of 2020 (not just during the Snapshot Period), as shown in Box 5 (Medicare wages and tips) of the employee’s IRS Form W2, and the employee’s corresponding pay band;
  • Number of hours worked in the entirety 2020 (not just during the Snapshot Period) and any form of paid time off the employee received;
• Group employees by job category, pay band, race/ethnicity/sex, and then calculate the total number of employees in each group and the total hours worked in 2020 by the employees in each group.
  • If no other employees share the same categories as an employee, the employee is reported as a group of 1 and is reported in the same fashion as groups of more than 1 employee (note: California pay data reports are not publicly available).
• Gather other required employer and establishment information, as well as any explanatory information that may need to be noted in the remarks fields.

California Pay Data Reporting Portal

Once the necessary information is collected, employers can open the California Pay Data Reporting Portal and submit their data in one of three ways: By uploading an Excel file, uploading a .CSV file, or by using the fillable form within the portal itself. For more information about this law and filing requirements, visit: www.dfeh.ca.gov/paydatareporting.

How Emplicity Helps Clients with California Pay Data Reporting 

As the Employer of Record, Emplicity can build the California Pay Data Report on behalf of their clients and submit the report to the DFEH, taking the administrative burden out of the hands of our small business owner clients.

Deferral of Pay Data Reporting Enforcement

In very specific situations, employers can submit an enforcement deferral request. The request must be submitted before the reporting deadline of March 31, 2021, and can only be submitted through the reporting portal by the employer. The employer must provide one of three reasons for the deferral request: Loss of records due to flood, fire, or other natural disaster; severe economic hardship; or the need for technology or infrastructure changes in order to complete reporting. This deferral, if approved, provides one additional month, expiring on April 30, 2021.