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FAQ’s For New Pay Data Reporting Requirements in California Have Been Released- Procedures Still Remain Unclear

The California Department of Fair Employment and Housing (DFEH) released a list of Frequently Asked Questions on November 2, 2020, that provided some guidance on how to file employee compensation data for the recently enacted Senate Bill 973.

SB 973 was signed by California Governor Gavin Newsom on September 30, 2020 and is a direct response to the now rescinded EEO-1 component 2 report. Through this, California employers with 100 or more employees are required to submit a pay data report to the DFEH that contains more information than what is required on the federal EEO-1. These state-level reports are due no later than March 31, 2021.

Since the bill was passed there has been little guidance and answers on how to report and what details are needed. The FAQs that were recently released do state that an additional list of FAQs will eventually be released as this first set still leaves a lot of questions unanswered. The DFEH also stated that they intend to issue regulations for implementation going forward.

However, the FAQs did cover the following:

Confidentiality

The DFEH will be publishing aggregate reports of the data once data is received, but individual employer data will not be identified upon publishing.

Reporting

Although no specifics were given, the FAQs did state that the DFEH is working on creating a system that is much like the already existing federal EEOC reporting system.

Forms

The DFEH does plan on issuing a standard form that employers will be able to use to report the needed compensation data.

While this set of FAQs is a step closer to a better understanding, there are a few key components that remain unaddressed.

  • It is still not clear what employers in California employers are required to report. We just know that it includes private employers with 100 or more employees but does not clarify if any sectors are exempt.
  • Workforce types are also in question as it does not specify if employers are only required to submit the data for employees based in California or all employees out of state as well.
  • It also does not clarify if an employer whose headquarters are located out of state, but they still have employees in CA, is required to submit the data report or not.
  • How hours are calculated, job category information, or specific pay bands also have yet to be addressed.

This set of FAQs do emphasize that the specifics to all of these questions and concerns will be released soon but no date has been set.  One thing is clear, this new reporting requirement in California is here to stay and employers need to be prepared.

Is there anything Payroll Systems can help you with as you accommodate rapid legislation changes? Reach out and talk to us about the easy-to-scale solutions you need for your business.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.