California SB 973 requires employers to submit pay data information on their workforce by March 31, annually. Did your business meet the deadline?
Employers that did not meet the deadline for submitting annual pay data reporting for the 2020 tax year to the Department of Fair Employment and Housing (DFEH) may be able to submit their pay data reporting through April 30, so long as they requested an enforcement deferral by the original deadline of March 31. After March 31, the DFEH will no longer be accepting extension requests from employers.
If your business did not meet the deadline and was not able to request an extension to submit your reporting, “you must file your report immediately to avoid DFEH taking further action to ensure compliance.” In addition, “the DFEH may seek a court order requiring an employer to comply with California’s pay data reporting requirements and shall be entitled to recover the costs associated with seeking the order for compliance.”
California’s SB 973 applies to private employers that have a U.S. workforce of 100 or more employees, are also required to file the federal EEO-1 report annually, and have at least one employee working in California.
Employers’ pay data report for California’s SB 973 should include the following information:
Number of employees by race, ethnicity, and sex, in each of the following job categories: executive or senior-level officials and managers, first or mid-level officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers;
Number of employees by race, ethnicity, and sex in each of the pay bands used by the U.S. Bureau of Labor Statistics and used in the Occupational Employment Statistics survey; and
Total hours worked for each employee in each pay band
Moving forward, employees should give special attention to the pay data reporting requirement. Consider partnering with a Professional Employer Organization (PEO) that specializes in pay data reporting and has mastery of equal pay regulations. In addition to preparing and submitting the final pay data report on behalf of your business, a PEO may also be able to help your business identify pay discrepancies that may exist within your workforce. This kind of expertise can help your business leverage a proactive approach to complying with California’s SB 973.
Best practices for meeting the California SB 973 pay data reporting requirement annually include regularly measuring and tracking your workforce data. This can help your business assess where it excels in terms of pay equity, but more importantly, identify potential disparities that may have gone unnoticed.
The landscape is shifting, and all parties, ranging from investors to employees are focusing on pay equity, diversity, and inclusion as part of the larger environmental, social, and governance (ESG) criteria.
If your business faced challenges with meeting California’s SB 973 pay data reporting requirements this year, now is the time to implement measures to prepare for next year.
Contact us to have a complimentary Equal Pay Risk Assessment performed and gain a better understanding of what your organization just provided to the DFEH. Taking the proactive approach will warrant better results in terms of progress towards achieving pay equity and minimizing legal action imposed by enforcement agencies.
Pay equity laws are coming into play all over the world. Download the Pay Equity Definitive Guide to understand what’s required of your business.