Seyfarth Synopsis: On January 31, 2024, California's Civil Rights Department released updated FAQs, Pay Data Reporting templates, and a User Guide for the upcoming California Pay Data Reporting submission for the 2023 reporting period. The updated FAQs introduce new definitions, new reporting requirements, and clarify prior guidance. The reporting deadline for this year is May 8, 2024.
California's Civil Rights Department ("CRD") has released updated FAQs, Pay Data Reporting templates for payroll employees and labor contractor employees, and a Pay Data Reporting Portal User Guide for the upcoming Pay Data Reporting submission due on May 8, 2024. As Seyfarth previously covered, in 2022 California expanded its pay data reporting obligations to cover both payroll employees and labor contractor employees.
CRD made several key changes to this year's reporting requirements, so it is important for covered employers to understand these changes before beginning the data collection process and constructing the pay data reports. Please note CRD's FAQs and guidance materials should be monitored frequently as the Department has regularly updated them (without notice) throughout prior reporting periods.
Here, we dive into the key issues addressed in the new FAQs, focusing primarily on the substantive changes from previous reporting requirements.
Remote Worker Reporting Obligation
In addition to reporting pay and hours worked data for payroll and labor contractor employees by establishment, submissions must now include information regarding the number of employees per employee group who worked remotely. Specifically, the data templates ask for (1) the number of employees that do not work remotely, (2) the number of remote employees located within California, and (3) the number of remote employees located outside of California. For purposes of pay data reporting, a "remote worker" is defined as "a payroll or labor contractor employee who is entirely remote, teleworking, or home-based, and has no expectation to regularly report in person to a physical establishment to perform work duties." The FAQs further explain that "employees in hybrid roles or (partial) teleworking arrangements expected to appear in person to perform work at a particular establishment for any portion of time during the Snapshot Period would not be considered remote workers for pay data reporting purposes."
Demographic Data No Longer Optional for Labor Contractor Reports
Another important change to be aware of is that reporting "unknown" race, ethnicity or sex of labor contractor employees is no longer permitted as it was last year. CRD's preferred method for collection of race, ethnicity, and sex data for both reports is voluntary self-identification. If a worker declines to provide the information, employers must nonetheless report on sex, race and ethnicity.
Publication of Results
In past years, CRD published aggregate results from the 2020 and 2021 pay data reporting years. This year, CRD plans to publish aggregate results from the 2022 reporting year and encourages employers to review these results. In addition, CRD recommends that employers assess their own pay data reports and pay practices in light of California's anti-discrimination and equal pay laws. CRD will also continue to provide employers with visualizations of their certified data via the online Pay Data Reporting Portal.
Reports Submitted Through Online Portal
Pay Data Reports are again required to be submitted through the CRD's reporting portal, availablehere. CRD will not accept reports submitted via any other method. For employers required to submit both a Payroll Employee Report and Labor Contractor Employee Report, each report must be submitted separately. CRD requires employers to use the current templates found on their website and warns that the portal will reject prior year templates. Currently, CRD's website indicates that access to the portal will be available at 8:00 AM PT, February 2, 2024.
Active Enforcement
CRD has the authority to seek an order requiring a covered employer to submit a pay data report when it has failed to do so, and may also recover any costs associated with any enforcement action. CRD may also seek civil penalties of $100 per employee, with the penalties increasing to $200 per employee for a subsequent failure to file a required report. These penalties can also be assessed against a labor contractor that has failed to provide required pay data to a client employer in a timely fashion. Employers should be aware that CRD is exercising this authority and is actively pursuing non-filers.
Filing Deadline
Unlike last year's reporting period, it does not appear that CRD will be accepting or granting any pay reporting submission deferral requests. The deadline for both sets of pay reports is May 8, 2024.
Next Steps for Covered Employers
Given these new reporting obligations, covered employers should ensure they have the newly required race, ethnicity and sex data, as well as remote worker designations, in order to comply with the changes to this year's payroll employee and labor contractor employee reporting obligations. As many employers and labor contractors experienced last year, collection and production of the reporting data requires a significant amount of time and cooperation with internal and external partners. Accordingly, it is imperative that the data collection for both sets of reports takes place as soon as possible given the upcoming deadline that is quickly approaching.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
