URGENT CA: Updated Information for the 2022 Pay Data Reporting

On February 28, 2023, the California Civil Rights Division (CRD) – formerly known as the California Department of Fair Employment and Housing (FEHA) – released updates to their frequently asked questions (FAQs) section on the 2022 California pay data reports, which covered employers must submit via the CRD’s pay data portal by May 10.

California’s pay data reporting law requires private employers with 100 or more employees to file annual pay data reports with the CRD, which include hourly rates within each job category, for each combination of race, ethnicity, and sex for its employees and workers employed through labor contractors.

Key Changes

• There’s a May 10 filing deadline for the 2022 pay data reports, and each covered employer is only required to file a single Payroll Employee Report and a single Labor Contractor Employee Report as applicable.
• Many foundational issues for the Payroll Employee Reports, including how to determine the snapshot period, whether the filing jurisdictional threshold has been met, and which employees to include in the report.
• Defining the terms “labor contractor employee” and “labor contractor” and explaining this newly added filing requirement in detail. These reports essentially mirror the Payroll Employee Reports as to the data covered employers must provide to the CRD. The Labor Contractor Employee Report must include “each labor contractor employee’s establishment, job category, race/ethnicity, sex, pay band, and hours worked.” Because employers generally do not hold this information, this will require close cooperation with the employer’s labor contractors. Employers must file this report if they had 100 or more labor contractor employees inside and outside of California in the chosen snapshot period or regularly had 100 or more labor contractor employees inside and outside of California during the reporting year. To determine whether the 100-employee threshold is met, all labor contractor employees must be counted in the aggregate, even if supplied by more than one labor contractor. Provided this standard is met, the presence of a single labor contractor employee in California requires the employer to file the Labor Contractor Employee Report. This means that the threshold for filing these reports is quite low and essentially matches the demanding jurisdictional threshold for the Payroll Employee Report.
• Steps to prepare and present the reporting data to the CRD, including defining the term establishment and explaining how employees should be assigned to those establishments. There are 10 reporting job categories, information regarding race/ethnicity and sex (including use of nonbinary gender), the updated pay bands, the continued use of Form W-2 Box 5 information (for wages and tips subject to Medicare tax), and total hours worked. There’s a new requirement to provide median and mean hourly rates for each unique employee group with the same establishment, job category, race/ethnicity, and sex combination. The agency currently lists 21 possible combinations of race, ethnicity, and sex. This guidance includes the method for calculating the median and mean rates and where the rates should be reported.
• The impact of professional employer organizations (PEOs) and human resource outsourcing organizations (HROs) on the report filing structure and their roles in filing reports on behalf of client employers.
• The jurisdictional impact of acquisitions, mergers, and spinoffs: Tips for resolving technical issues.

Active clients of Guardian HR can access step-by-step guidelines, a user guide, template reports as well as find the updated FAQ’s in the Forms Library under Compensation and Payroll\State Laws\California\CA Pay Transparency SB1152.