Deadline Approaching: California Employers Must Report Compensation Data by March 31st

On September 30, 2020, California Governor, Gavin Newsom, signed SB 973 into law. By March 31, 2021, private California employers with 100 or more employees and who are subject to EEO-1 reporting must submit a “pay data report” to the California Department of Fair Employment and Housing (DFEH).

What Are Employers Required to Report?

The pay data report must include a breakdown of employees by sex, race and ethnicity in 10 job categories. Specifically, the categories include: executive or senior level officials or managers; first or mid-level officials and managers; professionals; technicians; sales workers; administrative support workers; craft workers; operatives; laborers and helpers; and service workers. The pay data report must also include a delineation of employee compensation in 11 identified pay bands ranging from “less than $19,239” to “more than $208,000” based on W-2 wages. The report must include the number of employees in each pay band, along with information on sex, race and ethnicity and total number of hours worked.

What Is California Going to Use the Data for?

The intent of the California Legislature is clear by its legislative findings—the Legislature believes a discriminatory pay gap persists despite other recent legislation and now requires additional attention from the state. DFEH will review the pay data reported to ferret out discrimination in pay and hold employers accountable for differences in pay that are not authorized by law.