California Pay Data Reporting Updates

The California Pay Data Reporting program was enacted by the California Legislature in 2020. The program was launched to help address pay gaps facing women and certain racial and ethnic groups. 

In 2022, the Pay Data Reporting Bill was amended with Senate Bill (SB) 1162, changing some of the reporting requirements for employers. 

The California pay data reporting due date for 2024 is coming up on May 8. This article will help you prepare for that deadline. 

We’ll break down the pay data reporting changes going into effect from the 2022 amendment. We’ll lay out the information you’ll need to include in your report. And we’ll make sure you’re clear on how to avoid penalties by submitting your California pay data reporting correctly and on time. 

Breaking down SB 1162

Senate Bill 1162 enhanced the California Pay Data Reporting program in a number of ways. 

The amendment added a requirement regarding workers hired through labor contractors. It added data elements that need to be reported for all workers, expanded data to be collected on remote workers, and added a civil penalty against non-filers. Finally, it changed the annual California pay data reporting filing deadline from March 31 to the second Wednesday of May each year.  

Let’s take a closer look at each of these enhancements. 

What SB 1162 means for employers

All private employers with 100 or more payroll employees and/ or 100 or more employees hired through labor contractors, with at least one employee or contractor in or assigned to California, must submit a report. This is regardless of whether the employer has a federal EEO-1 reporting obligation. 

If your company is affiliated with others, and together you have 100 or more payroll employees and/or labor contractor employees, you need to submit a report. 

If you meet the above requirements, and one or more of your payroll employees or labor contractors worked in California and/or was assigned to a California establishment, you must submit a report. 

You will not report on employees or labor contractors who are not California-based and/or assigned to a California establishment. Remote workers working in California must be reported on regardless of their assigned establishment. 

An “establishment” is defined as “an economic unit producing goods or services. Examples include an office, store, or team of workers who work entirely remotely and do not have a physical office. (Source: California Civil Rights Department). 

For example, let’s say that in 2023, you had 40 payroll employees based in California. Then, you had 10 employees working remotely from outside of California but assigned to a California establishment. You also had 50 employees working in Arizona and not assigned to a California establishment. You would be required to submit a payroll employee pay data report. The report would include your 40 California-based employees, as well as your 10 remote employees assigned to a California establishment. 

You would not report on the 50 Arizona employees.

It’s also important to note that there are actually two distinct report types. 

If you’re an employer with 100 or more payroll employees, you will submit a payroll employee report. If you are an employer with 100 or more labor contractor employees, you will submit a labor contractor employee report. Of course, if you have both 100 plus payroll employees and 100 plus labor contractor employees, you will submit both reports. 

For both payroll employees and labor contractors, full-time and part-time employees are counted the same. 

Note that for the 2023 California pay data reporting year, three data fields were added to identify remote worker status for each employee. 

You’ll need to identify:

1. The number of employees that do not work remotely

2. The number of remote employees located in California

3. The number of remote employees located outside of California assigned to a California establishment 

Gathering the required pay data for the 2023 business year

Regardless of the type of report you are filing, you’ll need to collect data for each employee being reported on. You’ll then need to group your employees, and calculate data for each group. 

Individual level data 

First, you need to identify a “snapshot” period and collect data for each employee that is being reported on. As the employer, you choose your snapshot period. For this year’s reporting, the snapshot period needs to be a single pay period between 10/1/2023 and 12/31/2023.

For all California employees (as defined in the previous section) in the snapshot period, you need to identify the following: 

1. Establishment

2. Job category (from among the following options):

• Executive or senior-level officials/ managers 
• First or mid-level officials/manager 
• Professionals
• Technicians 
• Sales workers 
• Administrative support workers 
• Craft workers 
• Operatives
• Laborers and helpers 
• Service workers 

3. Race/ethnicity 

• Voluntary employee self-identification is the preferred method of self-identification.
• The racial and ethnic categories offered by the Department are: Hispanic/Latino, Non Hispanic/Latino White, Non-Hispanic/Latino Black or African American, Non-Hispanic/Latino Hawaiian or Other Pacific Islander, Non-Hispanic/Latino Asian, Non-Hispanic/Latino Indian or Alaskan Native, Non-Hispanic/Latino Two or More Races 

4. Sex 

• Again, voluntary employee self-identification is the preferred method of self-identification.
• The sex categories offered by the Department are: female, male, nonbinary.

5. Pay in 2023

6. Pay band: Using the employee’s W-2 Box 5 earnings, identity pay band among the following: 

• $19,239 and under
• $19,240 – $24,959
• $24,960 – $32,239
• $32,240 – $41,079
• $41,080 – $53,039 
• $53,040 – $68,119 
• $68,120 – $87,359 
• $87,360 – $112,319
• $112,320 – $144,559 
• $144,560 – $186,159 
• $186,160 – $239,199 
• $239,200 and over

7. Hours worked in 2023 

8. Hourly rate 

9. Status as remote worker 

Make sure to employ sensitivity in collecting sex and racial/ethnic identity data from employees for your California pay data reporting. 

It can be helpful to acknowledge to employees that unfortunately everyone’s preferred identity will not be represented in the options offered. It may also be helpful to clarify that the categories are provided by the California Civil Rights Department rather than employer-generated.  

Group level data 

Once each individual’s data has been identified, you’ll need to group together employees with the same establishment, job category, race/ethnicity, sex, and pay band. For labor contract employees, group employees with the same labor contractor, establishment, job category, race/ethnicity, sex, and pay band. In some cases, you might have groups of just one employee. 

For each group, calculate (note that some of this is new since SB 1162 passed): 

• Total hours worked in 2023 
• Mean and median hourly rates 
• The number of employees in the group who qualify as a remote worker under the Department’s definition 

Employer data 

To submit your reports, you’ll also need employer information, like: 

• The employer’s address on file with the California Employment Development Department (EDD)
• Total employees in the United States and in California
• FEIN, SEIN, NAICS code, DUNS number, and whether the employer is a state contractor

The Civil Rights Department will publish aggregate reporting results from all reporters. Additionally, once you submit your reports, the Pay Data Reporting Portal will provide you with visualizations of your data. This is to help you review your numbers against California’s anti-discrimination and equal pay laws.  

Getting in your pay data reports on time

The CA pay data reporting deadline is Wednesday, May 8, 2024. 

Use the Pay Data Reporting Portal to prepare and submit your reports. You have options in the portal for the format in which you submit your report(s). You may upload an Excel file, upload a CSV file, or complete fillable forms on the portal itself.

According to the Civil Rights Department, using Excel files is the most common and recommended method. You can find both Excel templates and CSV templates at the Civil Rights Department website. There are separate templates for each type of report (Payroll Employees and Labor Contractor Employees). The Excel templates have tabs with instructions and examples to help you fill things out correctly.

Note that you should not use templates from previous years, as the Portal will reject those submissions. 

We highly recommend reviewing the Civil Rights Department’s Pay Data Reporting Training Slides for detailed instructions and tips on preparing and submitting your report(s). You can also review the Department’s FAQ page. 

If you don’t participate in pay data reporting

The SB 1162 amendment established penalties for employers who fail to submit reports. The Civil Rights Department actively pursues non-filers. 

If you don’t participate in California pay data reporting, you can be fined up to $100 per employee. If you fail to file your report after the Civil Rights Department seeks an order requiring you to do so, you can be fined again, this time up to $200 per employee. You can also be held responsible for the costs incurred by the Department in seeking an order requiring you to comply. 

The Civil Rights Department can also seek monetary penalties against any labor contractor that fails to supply necessary data to a client employer. 

Make sure you submit your required pay data reporting before the California pay data reporting due date in 2024 to avoid these penalties! 

Wrapping up

We hope this article has helped you understand the updated requirements for California pay data reporting in 2024. 

The right accounting tools can make filing reports like this one so much easier. Take a look at Wrapbook’s new production accounting features to see how our tools can help your team collect, organize, and process data! To see our real-time capabilities, you can also watch a demo.