By Annette Tyman, Michael Childers, and Shardé Skahan
Seyfarth Synopsis: On February 1, 2021, California’s Department of Fair Employment and Housing released key information regarding the recently enacted Pay Data Reporting Law. Materials include a template of the pay report, along with user guidance.
With the first filing of the California Pay Report just around the corner on March 31st, employers have been anxiously awaiting additional guidance from the California Department of Fair Employment and Housing (DFEH) regarding the reporting template and implementation requirements of California’s recently enacted Pay Data Reporting Law (SB 973), codified at Government Code section 12999. On February 1, 2021, the DFEH released a portal User Guide, Excel Template and an example of a data submission.
Of note, the template and user guides break down the structure of the pay data reports and provide reporting examples to assist employers with the piecemeal clarifications released thus far. While the portal itself will not be available until February 16, 2021, the user guide also provides screen shots and detailed instructions about functionality and use of the portal.
As Seyfarth reported, the DFEH previously released rounds of FAQs addressing threshold issues regarding who must file pay data reports, which employees the reports must include, and, more recently, how the DFEH will define hours worked and methodologies for determining an employee’s pay, among other questions. The FAQs highlight a number of departures from the previous EEO-1 Component 2 reporting requirements. Some notable differences include:
- Who is Included: The applicability of these reports is far-reaching and there is no exemption for small establishments. Employers have the option of reporting on all employees, however, the reports must include, at a minimum, all employees who:
- Work in California;
- Live in California; or
- Report to a Location in California
- Definition of Pay: The DFEH advised that employers must calculate total earnings using W-2 Box 5 wages (versus the Box 1 wages used in Component 2 ).
- Definition of Hours Worked: Unlike EEO-1 Component 2, which used the FLSA definition of hours worked, the DFEH is requiring employers to include time for which the employee was paid regardless of whether that time was spent working or was paid time off. Paid time off could include paid vacation, paid sick time, or paid holidays.
As the pay reporting requirements develop, we will continue to provide updates. Seyfarth’s Pay Equity Group will further discuss the nuances of California pay reporting in a webinar on February 4, 2021, at 10:00 a.m. PT/12:00 p.m. CT/1:00 p.m. ET, and registration is available here.
For more information or for assistance with preparing for reporting, please feel free to reach out to Annette Tyman (firstname.lastname@example.org), Mike Childers (email@example.com), Shardé Skahan (firstname.lastname@example.org), or your Seyfarth attorney.
Edited by Elizabeth Levy