A Guide to California Expanded Pay Data Reporting Requirements

Employers with 100 or more employees are sufficiently familiar with California’s pay data reporting requirements. As of January 1, 2023, the Equal Pay Act was further amended by Senate Bill No. 1162 (“SB 1162”). The California Civil Rights Department (“CRD”), formerly known as the Department of Fair Employment and Housing (“DFEH”), recently provided an FAQ to guide employers through the amended pay data reporting requirements which can be found HERE. While the FAQ provides a comprehensive review of the new reporting requirements, some of the highlights are the following:

  1. Deadline Change: Pay data reports covering the 2022 reporting year are due on or before Wednesday May 10, 2023.
  2. Mean and Median Hourly Rates: The most significant change that resulted from SB 1162 requires employers to calculate and report the mean and median hourly rate of its employees and/or labor contractor employees by establishment, job category, race/ethnicity, and sex. The updated FAQs provide detailed instructions on how to calculate the mean and median hourly rates. Please note that the administrative time it will take to make these calculations is significant, so please allot sufficient time to make those calculations prior to the May 10, 2023 deadline.
  3. Increased Penalties for Nonfilers: SB 1162 incentivizes employers to timely report its pay data by increasing penalties for nonfilers. The CRD is now empowered to obtain penalties against any employer that fails to file a required report, as well as against any labor contractor that fails to supply necessary pay data to a client employer. SB 1162 allows the CRD to impose civil penalties of $100 per employee against an employer who fails to file a required report, with the penalty increasing to $200 per employee for a subsequent failure to file a required report. These penalties can be substantial and costly.
  4. Labor Contractor Worker Reporting: SB 1162 added the requirement that a private employer with 100 or more workers hired through labor contractors in the prior calendar year must file a separate “Labor Contractor Employee Report”. This report covers workers hired through labor contractors in the prior calendar year. This Labor Contractor Employee Report requires the employer’s labor contractors to provide necessary data and information to the employer submitting the report, as well as requiring the employer to identify their labor contractors. This requirement is in addition to the pay data report employers need to submit for their own employees. Further guidance on the Labor Contractor Employee Report can be found in the FAQs.

The updated FAQs provide comprehensive guidance on compliance with SB 1162. Fox Rothschild’s attorneys are available to assist you in preparing your pay data reports and Labor Contractor Employee Report. Please direct your questions to your Fox Rothschild attorney or the author of this post.