California employers have three months to report last year’s pay data to the state.
Key Developments
- The deadline to report your 2023 pay data is May 8, 2024. There is no deferral period this year.
- The California Civil Rights Division (CRD) published updated FAQs for pay data reporting on February 1.
- The agency also opened the portal for reporting on February 1.
Who Must File?
- Private employers with 100 or more employees
- A separate pay data report is required for labor contractor employees
What’s New?
The CRD made changes to the reporting templates, which require new or additional information than was required last year.
Remote Workers
Three new data fields were added to the reporting requirement to collect remote worker data:
- The number of employees that do not work remotely;
- The number of remote employees located in California;
- The number of remote employees outside of California assigned to a California establishment.
For purposes of pay data reporting, “remote worker” is limited to employees who are entirely remote, teleworking, or home-based, and have no expectation to regularly report in person to a physical establishment to perform their work duties. Employees who work a hybrid schedule or partial teleworking arrangements where they are expected to regularly 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.
Employers should use the Snapshot Period to determine whether an employee falls under the definition of “remote worker” for purposes of pay data reporting. For employees who may have been fully remote for part of the year but transitioned to a hybrid or in-office role for the other part of the year, whether they were a “remote worker” is determined by the Snapshot Period. If an employee was expected to report in person to a physical establishment during the Snapshot Period, whether or not they work remotely at other times of the year, the employee should not be reported as a remote worker.
Reporting “Unknown” for Demographic Information is No Longer Permitted
For the reporting year 2022, the CRD allowed employers to report “unknown” race/ethnicity for labor contractor employees in certain instances. This is no longer permitted. You will need to seek this information from your labor contractors in order to include it on the reports.
Penalties for Noncompliance
There are penalties for employers who fail to comply with the pay data reporting requirements. Penalties for non-filers include 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 are also assessable against a labor contractor that has failed to provide required pay data to a client employer in a timely fashion.
Red Flag Tips
1. Determine whether you need to file a Payroll Employee report or a Labor Contractor Employee report, even if you are based outside of California.
In addition to the Payroll Employee Report, a private employer with 100 or more workers hired through labor contractors in the prior calendar year (with at least one worker based in California) must file a separate Labor Contractor Employee Report that covers workers hired through labor contractors in the prior calendar year. A Labor Contractor is an individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business.
You should first review whether you will need to file a pay data report this year, either for payroll employees or labor contractors. Employers who did not file an Employee Payroll report last year based on having fewer than 100 employees should review whether your headcount has changed, which may require filing a report this year. In addition, review whether you have used 100 or more labor contractor employees (and at least one California employee), you many also be required to file a Labor Contractor Employee report.
Employers based outside of California with 100 or more employees who have even 1 employee in California are required to file a pay data report.
2. Identify your labor contractors and request the required labor contractor pay data report information.
You should identify your labor contractors and send out written communications to request the information needed to complete the Labor Contractor Employee report. While labor contractors are required to comply with these requests – and there are penalties for not doing so – the obligation to file the report falls on the employer using the labor contractors. Ensure your written request for information from labor contractors is sent out as soon as possible to allow them to timely gather the information, especially without the possibility of responding “unknown” for demographic information.
3. Prepare a plan for submitting your pay data report(s) before the May 8 deadline.
For our HR Department/Director clients, we will contact you regarding reporting requirements.
For all other clients, if you have 100/more employees and would like assistance or for HRN to complete the filing on your behalf, please contact us.
