California law requires employers with at least 100 employees and at least one California employee, to annually report pay, demographic, and other workforce data to the Civil Rights Department (“CRD”). This reporting is required under Government Code section 12999, and is part of the State’s efforts to promote equal pay.
Remote Worker Information Now Required
A new data field added this year requires employers to report the number of employees in an employee group who worked remotely. The State’s Pay Data Reporting FAQ’s provides that for pay data reporting, “remote worker” refers 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 in hybrid roles or (partial) teleworking arrangements 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.”
Last Year’s Additional Requirements Are Still In Effect
Changes implemented last year remain in effect, including the requirements to report workers hired through labor contractors, as well as reporting mean and median pay rates.
Employers must still file a separate Labor Contractor Employee Report that covers workers hired through labor contractors in the prior calendar year. Employers only submit one report that covers labor contractor workers at all of an employer’s establishments.
Mean and Median Hourly Rate
Employers are also required to calculate and report the mean and median hourly rate of its payroll employees and/or labor contractor employees, by establishment, pay band, job category, race/ethnicity, and sex. Employers should calculate each employee’s individual hourly rate before calculating the mean and median hourly rates. The mean hourly rate is calculated by adding the individual hourly rates for each employee in the group, then dividing that sum by the number of employees in the group. The median hourly rate is calculated by ordering the hourly wages of each employee in the group from smallest to largest and selecting the middle number.
Penalties For Failing to Report
The penalties for employers that fail to file a required report can reach $100 per employee and increase to $200 per employee for a subsequent failure to file a required report. These penalties are also assessable against a labor contractor that failed to provide required pay data to a client employer in a timely fashion. The CRD is also entitled to recover its costs in any enforcement action against an employer.
Employers may wish to review the California Pay Data Reporting: Frequently Asked Questions prior to reporting or reach out to Hunton Andrews Kurth attorneys for assistance.