The California Department of Fair Employment and Housing (DFEH) is now issuing non-compliance notices to employers it believes failed to comply with the State’s pay data reporting law for the 2020 tax year.

DFEH agents say some 35,000 notices will go out to employers over the next several weeks. California’s pay data reporting law, known technically as SB 973, mandates that certain employers submit pay information on their workforce by March 31 annually, though it was extended to May 31, for the 2020 tax year.

In the non-compliance notice, the DFEH makes clear that the employer must take action immediately. Within 30 days from receipt of the letter, an employer must do one of the following:

  • File the SB 973 pay data report
  • Contact the DFEH and prove that the report was already submitted
  • Inform the agency that your organization is not required to file the annual pay data report

Furthermore, the non-compliance notice states that if an employer does not respond timely to the notice with sufficient information, SB 973 “authorizes the DFEH to seek a court order requiring you to file your Annual Pay Data Report and to recover costs associated with seeking that order, including reasonable attorney fees.”

While specific penalties for failing to comply with SB 973 pay data reporting requirements are still unknown, the aforementioned language indicates that the agency is taking compliance seriously. In addition, the DFEH will most certainly use the pay data collected to enforce California’s Equal Pay Act.

Finally, the notice says that employers must submit the Annual Pay Data Report by no later than December 10, 2021, for the 2020 tax year. 

Unsure if your organization needs to submit the Annual Pay Data Report as mandated by California’s SB 973? Here’s who must comply:

  • Private employers with a U.S. workforce of 100 or more employees
  • You’re required to file federal, EEO-1 reports to the EEOC annually
  • You have at least one employee working in the state of California 

Employers that meet the above criteria must include all their full-time and part-time employees’ wage information in the SB 973 Annual Pay Data Report. You can file the information in the California Pay Data Reporting Portal.

Organizations that didn’t meet the requirement for the 2020 tax year must act quickly as the reporting deadline for the 2021 tax year is in a few months. Check out our Pay Data Reporting Checklist to ensure you’ve remembered everything.

If you need assistance aggregating, verifying, and completing your employee wage data for the annual Pay Data Report, whether for the 2020 tax year or the upcoming one, contact us to learn about our pay data reporting services

We can help you make sense of your pay data information before you file it so there are no surprises when, not if, the agency begins to inquire into unexplained pay disparities identified in your filings. We can also assist with other U.S. and international pay data reporting requirements.

There’s more to know about California’s SB 973 pay data reporting requirement for employers, download our white paper to learn what’s expected of you.

Download California SB 973 White Paper

Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.

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