On September 30, 2020, California Governor Gavin Newsom signed into law SB 973, which imposes new pay reporting requirements on certain employers. The law, which takes effect on January 1, 2021, requires employers to file an annual pay data report by March 31 of each year.
Under the new law, California employers with 100 or more employees, who were required to file an annual EEO-1 report under federal law, are now required to submit a pay data report to the California Department of Fair Employment and Housing (DFEH), that mirrors the reporting requirements of the EEO-1 form. Specifically, the report must include:
- the number of employees by race, ethnicity, and sex in each of ten broad job categories, and
- the number of employees by race, ethnicity and sex whose annual earnings (defined as W-2 income) fall within each of the pay bands established by the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics survey.
The report must also include the total hours worked by each employee within a given pay band. For reporting purposes, employers will create and submit a “snapshot” pay period in which it counts all individuals who were on the employer’s payroll in any single pay period of the employer’s choice between October 1 and December 31.
The journey to this new California requirement began in January 2016, when the EEOC announced a revision to the EEO-1 Report to include disclosure of aggregate employee pay data by gender, race, and ethnicity. The EEOC required employers to begin using the new EEO-1 Report (including pay data) in 2018. But, in 2017, the Trump Administration postponed this pay data collection indefinitely. Pay equity advocates challenged this decision, and the Court ordered EEOC to reinstate the collection for the 2017 and 2018 filing years (filed jointly in 2019). EEOC is currently studying the quality and utility of the pay data is collected. In the meantime, the EEOC concluded that the burden on employers “far outweigh[s]” the pay data’s “unproven utility” and discontinued all pay data collection efforts.
With this new law, it appears the Golden State balances these interests differently. According to the state legislature, California believes continued data collection will permit the state to "more efficiently identify wage patterns and allow for targeted enforcement of equal pay or discrimination laws."
Reporting with Avionté
Prior to the EEOC retracting all pay data collection requirements – reporting was completed to comply with the Federal EEOC-1 Component 2 requirements:
- By race, ethnicity, and sex;
- In each of the Job Categories in the federal EEO-1 Report; and
- 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.
- Total hours
Knowledge Base Article: Standard AQ - Federal EEO Component 2 Reporting AQ
Race Gender Code
Race/Ethnicity/Gender Codes are as follows:
A: Hispanic or Latino Males
Pay Band Code
Pay Band Category Codes are as follows:
EEO Category ID
EEO Job Category IDs Are as follows:
Total Employees Per Category, No Negatives
Total Hours per Category, No Negatives
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