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  • DFEH publishes initial round of FAQs regarding SB 973’s pay data reporting requirement. 

    Employers Group | 11/05/2020 | Blog, Featured

    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 paydatareporting@dfeh.ca.gov to pose additional questions not answered below.

    1. 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.

    1. 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

    Guidance coming soon

    1. PAY

    Guidance coming soon

    1. HOURS WORKED

    Guidance coming soon

    1. MULTI-ESTABLISHMENT EMPLOYERS

    Guidance coming soon

    VII. ACQUISITIONS AND MERGERS

    Guidance coming soon

    VIII. SPINOFFS

    Guidance coming soon