California’s New Employer Pay Data Reporting Requirements [SB 973]

On Sept 30th, 2020, California’s Governor Gavin Newsom signed into law Senate Bill 973, a bill which enacts extensive pay reporting requirements for employers to help reduce gender and racial pay gaps. Starting in 2021, SB 973 requires businesses with 100+ employees to submit annual pay data reports by gender, race, and ethnicity to the California Department of Fair Employment and Housing (DFEH). The deadline to submit the first Pay Data Reporting will be on 3/31/21, and annually thereafter. 

This new reporting requirement may sound familiar, as the components of the required reporting follow similar guidelines of the Federal EEO-1 reporting. The SB 973 Reporting is comprised of two specific components:

Component 1 ) The number of employees by race, ethnicity, and sex in 10 different job title categories [Established by the Bureau of Labor Statics in the Occupational Employment Statics Survey, 10 Job Categories are as follows: 1. Executive/Senior Level Officials & Managers, 2. First or Mid-Level Officials and Managers, 3. Professionals, 4. Technicians, 5. Sales Workers, 6. Administrative Support Workers, 7. Craft Workers, 8. Operatives, 9. Laborers and Helpers; and10. Service Workers]

Component 2) The number of employees by race, ethnicity and sex, whose annual earnings fall within each of the pay bands used by the U.S. Bureau of Labor Statistics in the Occupational Employment Statics Survey.

Not only are employers required to submit the previous years W-2 Hours & Earnings, but they also must submit a “snapshot” of their workforce for any single pay period between Oct 1st and Dec 31st.

Companies who are above the 100+ employee threshold and who are required to file this reporting should continue to check with the Department of Fair Employment and Housing Website for the most up to date information: https://www.dfeh.ca.gov/paydatareporting/

Disclaimer: These materials are provided for informational purposes only and are not intended as legal or tax advice. Readers of the Innovative Blog should contact their legal or tax professionals to discuss how these matters relate to their individual circumstances.

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