Earlier this month, the California Department of Fair Employment and Housing (DFEH) opened the portal for reporting of 2021 pay data submissions.
In the press release from the state agency, the DFEH also stated that it is currently reviewing more than 22,000 reports for the year 2020's reporting period and will release findings in the coming months.
DFEH Director Kevin Kish said, "By requiring large employers to report pay data annually to DFEH, the California Legislature sought to encourage employers to themselves examine how they are compensating their employees in order to promote voluntary compliance with equal pay and anti-discrimination laws."
If you're unfamiliar with the landmark law that encourages pay equity in California(SB 973), also known as the Pay data reporting regulation, requires employers to report annually on employee pay information to DFEH. Not sure if the law applies to your company? Here's a list of the companies to which the law is applicable.
All private employers that submit the EEO-1 federal report every year, have 100 or more employees, and at minimum, one employee residing in California must adhere to California's SB 973 Pay data reporting law.
Employers should provide the following details on their payroll data reporting forms:
- The number of employees listed by race, sex, and ethnicity in executive or senior-level positions and first or mid-level officials and managers, professionals, technicians, administrative support, sales, laborers, craft workers, operatives and helpers, and service positions.
- The number of employees listed according to gender, race, and ethnicity in each pay band used in the U.S. Bureau of Labor of Statistics (BLS) and the Occupational Employment Statistics Survey.
- The total hours worked per employee in every pay band.
To submit their employees' pay data, employers must be aware that they will be required to report on their employees' pay until April 1 2022. The previous year, the DFEH granted extensions until April 30; however, it's unclear whether the agency will offer the same level of leniency in the future.
There's no question that Senate Bill 973 created a stir on the California employers' landscape in the past. As a result, in November 2021, the DFEH started sending notices of non-compliance to employers who did not submit their pay data reporting snapshots for the fiscal 2020 year. About 35,000 notices have been issued since then, and it is believed that penalties will be imposed on those who did not comply with the requirements outlined within the notification.
This law has already been used to increase equality in pay at work. Recently, California entertainment company Riot Games settled a $100 million lawsuit for gender discrimination through the DFEH.
The most important element to the outcome of the decision was access to crucial pay data. It is believed that the Riot Games settlement is the first instance involving claims under the state of California's SB 973, which regulates the reporting of payment information.