Guide to California Pay Data Reporting Requirements 2023

With the passage of California Senate Bill 1162 (SB 1162), the Pay Transparency Act, in September of 2022, businesses that operate in or hire out of California have new requirements to meet for payroll reporting.

This new law, which went into effect on January 1, 2023, sets new standards for Pay Data Reporting (PDR) to help businesses better identify existing pay disparities and prevent potential pay disparities for employees based on race, ethnicity, sex, and other protected characteristics. Visit the main page for California Pay Data Reporting here: https://calcivilrights.ca.gov/paydatareporting/

The Pay Transparency Act is a further evolution of California’s existing Pay Data Reporting law—a law that is important for any business located in California or hiring out of California to understand. California business law can be complex and difficult to navigate, so we’ll break down the basics of California pay data reporting laws, including what’s changed since SB 1162 went into effect.

What is CA Pay Data Reporting?

In 2020, California enacted its first Pay Data law, SB 973, which requires California employers of a certain size to submit annual reports containing employee Pay Data for the previous calendar year. The purpose of the California Pay Data Reporting law is to better ensure pay equity across race, ethnicity, sex, and other protected characteristics. California’s Pay Data law was later amended by SB 1162 in 2022 to provide further salary transparency.

Why is California Pay Data Reporting important?

The state of California is dedicated to achieving pay equity. Pay equity benefits families and the economy as a whole by ensuring that all California residents receive the same honest day’s pay for the same honest day’s work. California’s Pay Data Reporting law is designed to help companies identify and prevent the sometimes-unconscious bias that leads to wage disparities on the basis of protected characteristics.

What’s New for 2023 – Important Information for Your 2022 CA Pay Data Reporting

Due to the passage of SB 1162, some requirements for pay data reporting have changed compared to last year. Your Pay Data Reporting for the 2021 calendar year, for example, was overseen by the California Department of Fair Employment and Housing, and only included in-house employees and not labor contractors from third parties such as staffing agencies.

Now, under California’s new Pay Data Reporting regulations, both companies that employ 100 or more workers and companies with 100 or more labor contractors are required to report pay data. If a company has more than 100 in-house employees and 100 contractors, it must file two separate reports for both categories of worker.

In a significant departure from the federal EEOC reporting, the upload to the state is no longer a simple export from your HR database. The California reporting requirements now include computations and data mapping based on state assigned codes and classifications.

Another important change over the previous CA Pay Data Reporting law is that Pay Data Reporting now must include calculated wage data including Mean and Median hourly rates and total hours worked for each reported Pay Band and Race-Ethnicity-Sex Code.

Pay Data is now overseen by the California Civil Rights Department, formerly known as the Department of Fair Employment and Housing. Submission of pay data reports is done through a secure online portal, and cannot be substituted with a federal EEO-1.

The reporting deadline for the 2022 calendar year’s PDR has shifted from March 31 to May 10, 2023, and will be the second Wednesday of May for all subsequent years.

Finally, new standards for including salary ranges in job postings (both internal and external) have been introduced as part of the Pay Transparency Act. Pay scale and job application reporting is overseen by the California Department of Industrial Relations.

Let’s go more into detail on these requirements, new and old alike, and make sure you’re up to speed on PDR in the Golden State:

Who is affected by CA Pay Data Reporting laws?

Under CA Pay Data Reporting laws, private employers with 100 or more employees and/or workers hired through third-party contractors such as staffing firms are required to report employee pay data to the California Civil Rights Department (CRD).

Your business is required to report pay data if you meet the following criteria:

• You are a private employer with 100 or more employees
• You have one employee working at an establishment in California and/or at least one employee living in California

If your business employs 100 or more people hired through third-party labor contractors, you are also required to submit a separate Pay Data Report solely covering contracted employees. In this pay report, you are required to disclose the ownership names of the labor contractors who supplied these contract employees as well.

Will California soon require Pay Data to be public?

SB 1162 added additional requirements for California businesses with 15 or more employees to include salary ranges on all job postings, internal and external, and to provide salary range information to any employee regarding their position on request. However, currently, under CA Pay Data Reporting laws, an employer’s data will not be publicly available except under extremely specific circumstances.

All individually identifiable information submitted in a Pay Data Report to the CRD is considered confidential information and is not subject to disclosure pursuant to the California Public Records Act.

For more answers to frequently asked questions about California Pay Data Reporting, feel free to check out the CA Civil Rights Department’s PDR FAQ.

What data must be reported under CA Pay Data Reporting?

The data required under CA Pay Data Reporting law includes pay and hours worked by establishment, job category, sex, race, and ethnicity. Here’s a full breakdown of the types of data you’ll need to provide for a given calendar year:

• Your business’s NAICS code
• A count of your employees by race, ethnicity, and sex in each job category for the given calendar year:
  • Executive/senior officials and managers
  • Mid-level officials and managers
  • Professionals
  • Technicians
  • Sales workers
  • Administrative support workers
  • Craft workers
  • Operatives
  • Laborers and helpers
  • Service workers
• Each employee is represented by a specific pay band. A count of your employees by race, ethnicity, and sex by pay bands according to the earnings numbers from their W-2 for the reporting year, using the same pay bands used by the US Bureau of Labor Statistics’ Occupational Employment Statistics surveys:
  • $19,239 and under
  • $19,240–$24,439
  • $24,440–$30,679
  • $30,680–$38,999
  • $39,000–$49,919
  • $49,920–$62,919
  • $62,920–$80,079
  • $80,080–$101,919
  • $101,920–$128,959
  • $128,960–$163,799
  • $163,800–$207,999
  • $208,000 and over

Based on demographic data each employee is assigned to specific Race-Ethnicity-Sex Code from the list provided by the CA Civil Rights Department.

• Race-Ethnicity-Sex Code List:
  • A10 – Hispanic/Latino – Male
  • A20 – Hispanic/Latino – Female
  • A30 – Hispanic/Latino – Non-Binary
  • B10 – Non-Hispanic/Non-Latino – Male – White
  • B20 – Non-Hispanic/Non-Latino – Male – Black or African American
  • B30 – Non-Hispanic/Non-Latino – Male – Native Hawaiian or Other Pacific Islander
  • B40 – Non-Hispanic/Non-Latino – Male – Asian
  • B50 – Non-Hispanic/Non-Latino – Male – American Indian or Alaskan Native
  • B60 – Non-Hispanic/Non-Latino – Male – Two or more races
  • C10 – Non-Hispanic/Non-Latino – Female – White
  • C20 – Non-Hispanic/Non-Latino – Female – Black or African American
  • C30 – Non-Hispanic/Non-Latino – Female – Native Hawaiian or Other Pacific Islander
  • C40 – Non-Hispanic/Non-Latino – Female – Asian
  • C50 – Non-Hispanic/Non-Latino – Female – American Indian or Alaskan Native
  • C60 – Non-Hispanic/Non-Latino – Female – Two or more races
  • D10 – Non-Hispanic/Non-Latino – Non-Binary – White
  • D20 – Non-Hispanic/Non-Latino – Non-Binary – Black or African American
  • D30 – Non-Hispanic/Non-Latino – Non-Binary – Native Hawaiian or Other Pacific Islander
  • D40 – Non-Hispanic/Non-Latino – Non-Binary – Asian
  • D50 – Non-Hispanic/Non-Latino – Non-Binary – American Indian or
  • D60 – Non-Hispanic
• The Mean Hourly Rate, Median Hourly Rate, and the Total Hours Worked based on W2 wages for each possible combination of classification must be determined and reported.
  • Establishment
  • Location
  • Job Category
  • Pay Band
  • Race
  • Ethnicity
  • Sex

For each Establishment and Location there are 2,520 possible combinations of data provided for: job category, pay band, and race/ethnicity/sex:

• 10 job categories x 12 pay bands x 21 race/ethnicity/sex combinations = 2,520
• A listing of all of 2,520 possible combinations is available here: https://calcivilrights.ca.gov/wp-content/uploads/sites/32/2021/01/EmployeeDetailVisualization.pdf

How to Prepare for CA Pay Data Reporting

Initially, under SB 973, employers could fulfill their Pay Data Reporting obligations to the CRD simply by filing a federal EEO-1 (Employer Information Report). As long as the EEO-1 contained the Pay Data information required by CA Pay Data Reporting law, the CRD could simply use the federal EEO-1 for their records.

However, in order to streamline reporting, this has changed with SB 1162, which established that all private employers with 100 or more employees and contractors must file annual Pay Data Reports directly with the CRD. Reporting is done via a secure online portal and stored in a government cloud database, both of which meet all necessary state and federal standards for data security, ensuring that company data is kept private.

Reporting Pay Data to the CRD via their secure online portal is a simple four-step process, and your business’s Pay Data information can be uploaded in an Excel or CSV for processing.

What is the California Pay Data Reporting deadline?

The CA Pay Data Reporting deadline is the second Wednesday of May every year, making the 2023 deadline for the 2022 calendar year May 10, 2023. SB 1162 changed the annual deadline for CA Pay Reporting from its original date of March 31, giving businesses responsible for pay data reporting some welcome extra time to prepare and submit their records.

Compliance with CA Pay Data Reporting Laws

While compliance with Pay Data Reporting may seem daunting, it’s important for your business’ to take the time and effort to accurately report Pay Data. Failing to comply with California Pay Data Reporting laws can come with stiff penalties. If your business meets the requirements for compliance with CA Pay Data Reporting law and fails to meet the submission deadline, failure-to-report fines can total up to $100 per employee, or up to $200 per employee for repeated offenses.

Compared to many other US states, California has a complex and complicated set of employment laws, legal standards, and requirements for businesses to meet surrounding payroll, hiring, recruitment, and more.

We help payroll reporting specialists take the hard work out of compliance with California Pay Data Reporting laws and standards. Got questions?

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