California Pay Data Reporting is a fairly new requirement with the first annual report due in May 2023. Certain employers are required to report a variety of workforce data to the Civil Rights Department (CRD) annually as specified via California Senate Bill 1162.
Senate Bill 1162 stipulates that employers must annually submit pay and demographic data to the state. By requiring the California Pay Data reporting, the state hopes to encourage employers to self-assess pay disparities among differed groups of their workforce. This, in turn, will promote voluntary compliance with equal pay and anti-discrimination laws.
Who is required to report with the California Civil Rights Department?
California law requires private employers with 100 or more employees and/or 100 or more workers hired through labor contractors (labor contractor employees) AND either are located in California or employee at least 1 CA worker to annually report pay, demographic, and other workforce data to the Civil Rights Department (CRD). This reporting is required under Government Code section 12999, as amended by Senate Bill 1162 on September 28, 2022.
What information needs to be reported?
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
What if the employer doesn’t have a State EIN for California?
State EIN is a required field in the Employer Information section of the report. If the employer does not have a State EIN (SEIN) and is not based out of California, then they can enter “00000000”.
Alternatively, if the employer or establishment is based out of California, then they should apply for an SEIN with the state.
How should the information be reported?
Using an authorized vendor, such as BoomTax, is simplest and easiest option for these reports. Vendors like BoomTax only require a simple data file upload of employee data. Then, they split the data into the specified groups as required by the California Civil Rights Department (CRD) and send it over.
Alternatively, employers can use the CRD portal to input and upload the data themselves. However, this option will require much more data entry and manipulation as the CRD only wants group level data, not employee level data. Analyzing and culling down the information into the specified format for over 2500 possible group combinations this can be stressful and error-prone.
When are California Pay Data Reports due?
California pay data reports are due by the second Wednesday of May each year, beginning in May 2023.
The tax year 2023 deadline is May 10th, 2023. All Payroll Employee Reports and Labor Contractor Employee Reports must be submitted by this deadline.
How can I contact California regarding Pay Data Reporting?
California has many great resources listed on their site, including a thorough Frequently Asked Questions page and many user guides. They have also state that they may be contacted if employers and filers have additional questions that are not answered by their resources. Please find their contact information below:
Communication Center phone numbers:
• 800-884-1684 (voice)
• 800-700-2320 (TTY) or California’s Relay Service at 711
Email address: [email protected]
In conclusion, it is important for employers to be aware of any requirements and obligations they have for California Pay Data Reporting submissions. This new reporting is mandated by the California Civil Rights Department requiring many employers to submit California pay data information regarding their workers to the state.
Many employers, including those with business based outside of California, will have new reporting requirements. Each employer must be aware of these requirements and ensure that they report their Payroll Employee and Labor Contractor Employee Pay Data Reports by the deadline.
Use this interactive questionnaire tool for California Pay Data Reporting Questionnaire to help determine if filing is required in under a minute.
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.