Earlier this year we spoke in a webinar on pay data reporting with Hacking HR. The focus of our presentation related to California’s SB 973 and the employee pay data reporting requirements.
While the deadline for submitting pay data reporting information for the 2020 tax year has since passed, we thought it would be beneficial to share with our readership some of the most complex questions asked relating to pay data reporting. Readers should know the information provided below does not and is not intended to, constitute legal advice; this Q+A is provided for general informational purposes only. See below answers to six questions we were asked during the webinar:
Q: We report under one FEIN but have over 100 locations. Do we need to report each employee at their actual location or can we report all employees at our HQ address?
A: According to the guidance, you would report them at the locations where the work is performed. To the extent that your compensation varies with location, it is advantageous to report by location.
Q: If you have 150 seasonal staff for the summer, but only 60 employees who work year-round, full-time, does the employer have to report?
A: That is considered “regularly employing” more than 100 employees. If the employer is also required to file an EEO-1 report, they would be required to file.
Q: How do you count seasonal employees for purposes of submitting pay data reporting?
A: The guidance states that “an employer that employed 100 or more employees during that season” meets the “regularly employed” threshold. This seems to indicate a count of the total number of employees employed during the season.
Q: What is the reason behind the regulation for employers having to report hours for exempt employees who work more than 40 hours per week? Employers normally do not track this information, since they are exempt.
A: Regulators are probably asking for hours so that they can make comparisons between employees that control for hours. If two employees are both being paid $40,000 but one works 50 hour weeks and the second works 40 hour weeks, the effective wage of the 2nd employee is higher.
Q: My organization has 200 employees in the U.S., but only eight in California. Do we need to report for all the employees or just the eight in California?
A: You are required to report all employees either working in California or reporting to a California establishment. You are not required to report non-California employees reporting to non-California establishments but you may include them in your report.
Q: As a business owner, I have 47 locations in California. Should I report the employees on their specific locations or should I use our headquarters address?
A: The guidance indicates you would report them at the locations where the work is performed. To the extent that your compensation varies with location is it advantageous to report by location.
The pay data reporting requirements of SB 973 have imposed new challenges for employers large and small across California. We’ve helped employers meet their new responsibilities. If you have additional questions about pay data reporting and SB 973, visit our blog post, California Pay Data Reporting Most Commonly Asked Questions.
Employers that do not have operations in California are not off the hook with regards to pay data reporting, as several other states, including Illinois, New Jersey, and Oregon are passing their own data reporting requirements. Legislation is anticipated on a federal level to require employers to submit pay data on their workforces. It could be in the form of EEO-1 Component 2 or something new altogether.