Reporting requirements in California’s Pay Data Reporting Act – enacted on September 30, 2020 – are about to take effect. The Act requires private-sector employers with 100 or more employees (even if only one of those employees is in California) to report employee pay and hours worked by race, ethnicity, and sex across ten different job categories to the Department of Fair Employment and Housing (“DFEH”). Reporting must be done before the March 31, 2021 deadline.
The DFEH’s Pay Reporting Portal is now open and can be accessed here, along with additional information and guidance from the DFEH as well as a reporting template. Generally, the DFEH report must identify the number of employees by race, ethnicity, and sex (female, male, and nonbinary) within certain job categories for the prior calendar year, along with the total number of hours worked by certain employees.
How do I know if my business is required to report?
To determine if your business must comply with the reporting obligation, the number of employees is measured by either:
- “Snapshot Period” – the number of employees during a single pay period between October 1 and December 31 of 2020; or
- Regular employment of 100 or more employees during 2020. It includes part-time workers, workers on paid or unpaid leave, furlough, or other kinds of employment-related leaves of absence. Independent contractors should not be included.
What if I need additional time to report?
Due to the COVID-19 pandemic and the new compliance obligations, the DFEH has indicated that it will consider an employer request for a one-month enforcement deferral. An employer seeking a deferral must complete the online request form before March 31, 2021. Be prepared to provide the reason for the deferral request and other required information in order to be eligible for reporting deferral to April 30, 2021. Otherwise, a failure to comply can result in fines equivalent to the costs associated with the DFEH’s attempts to enforce compliance.
What’s the takeaway? With the DFEH reporting portal open and compliance documents available, covered California employers should prepare to report pay data information to the DFEH by the March 31, 2021 deadline. Do not hesitate to contact us for assistance and questions with this new compliance requirement.
