In recent years, California has enacted legislature in order to address pay discrimination and promote fair compensation practices among employers. Among this legislation is Senate Bill 1162 which requires CA Pay Data Reporting information to be submitted to the California Civil Rights Department (CRD)
Terminology to Know
Be sure to brush up on the California Pay Data Reporting terminology and definitions before starting on your reporting.
Why does California require this reporting?
California legislation has enacted Senate Bill 1162 to help fix pay discrimination amongst different groups of peoples. The new bill amends CA Government Code section 12999.
Who is required to submit CA Pay Data reports?
There are two types of CA Pay Data Reports: the Payroll Employee Pay Data Report and the Labor Contractor Employee Pay Data Report.
Some employers may only be required to submit one or the other, while some will be required to submit both. The requirements to determine if are as follows:
- Payroll Employee Pay Data Report
- Private employers with 100+ employees in the previous year AND
Either are based in CA or employ at least one employee in CA
- Labor Contractor Employee Pay Data Report
- Private employers with 100+ Labor Contractor Employees hired through Labor Contractors AND
- Either are based in CA or employ at least one Labor Contractor Employee in CA
- The employee counts do include remote workers.
- If the employer is affiliated with other entities, then the employee count determination is based on all affiliated entities.
- If an employer hires Labor Contractor Employees through multiple Labor Contractors, then the count is based on the total number of workers hired through Labor Contractors.
Use our infographic below or our questionnaire to determine if you need to file.
What data is required to be sent?
California has two separate pay data reports: the Payroll Employee Pay Data Report and the Labor Contractor Pay Data Report. These both require the following information:
- Employer and Establishment information
- Employee Group Data
- Job Category codes
- Race/Ethnicity/Sex codes
- Pay Band codes
- Number of employees
- Mean – Hourly rate
- Median Hourly rate
- Total Hours
- Clarifying remarks (if applicable)
The Labor Contractor Employee Pay Data Report also requires a bit more information:
- Labor Contractor Name and FEIN
- Snapshot Begin Date
- Snapshot End Date
When is the deadline to report CA Pay Data?
The deadline to submit CA Pay Data Reports is the second Wednesday of May each year. The first due data is May 10, 2023.
The CRD announced that as of April 18, 2023 they would begin accepting “enforcement deferral requests” from employers for their Labor Contractor Employee Reports. If granted, the CRD will defer the
How are penalties assessed?
Penalties are assessed for failure to file.
There are penalties for failure to file a required CA Pay Data Report. There are also penalties for Labor Contractors for not providing the necessary data to a Client Employer.
The CRD may impose civil penalties of $100 per employee against an employer who fails to file a required report. Penalties increase to $200 per employee for each subsequent failure to file.
Please note: these same penalties may apply to Labor Contractors that do not supply the necessary data to Client Employers.
In conclusion, the CA Pay Data Reporting requirements that were introduced by SB 1162 represent California’s commitment to addressing pay inequality and promoting fair compensation.
It’s important that employers familiarize themselves with all of the reporting requirements, key definitions, examples, and deadlines that are associated with CA Pay Data Reporting.
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.