California employers have until May 8 to submit last year’s pay data to the state. The reporting portal opened Feb. 1.
California law requires private employers with 100 or more employees and/or 100 or more workers hired through labor contractors to submit information annually on pay and demographics.
While the law is not new, some of the requirements have changed this year, and employers should take note, Jacklin Rad, a partner at Fisher Phillips, told HR Dive. Employers also need to recognize that even if they only have one employee in California, they must abide by the reporting requirements — even if all their other workers reside outside the state.
“We’re expecting that a lot of those employers don’t know that they need to file,” Rad said.
A new requirement this year is submitting information on remote workers, Rad explained. This includes the number of employees who don’t work remotely, the number of remote workers in California and the number of remote workers outside of California assigned to a California site.
“We think it's because the state believes there may be pay discrepancies for employees who are remote versus their colleagues who are in the office,” Rad said, adding, “I haven't seen any solid evidence or trends indicating that is actually happening. I think this is just an effort by the state to collect more information to analyze.”
The state also will no longer allow companies to report “unknown” race/ethnicity for labor contractor employees.
Companies who fail to comply with requirements can face a $100 civil penalty per employee, and $200 per employee for subsequent failures to file, Fisher Phillips explained in an employer guide. Those penalties also apply to labor contractors who fail to provide pay data to client employers, the law firm said.
“All of us in this industry are just waiting to see what that kind of enforcement is like,” Rad said.
Fisher Phillips offers a three-step guide for employers.
- Determine if you need to file a report — a payroll employee report and/or a labor contractor employee report — even if the company is based outside of California.
- Identify labor contractors and request the required labor contractor pay data report information from them.
- Prepare a plan to submit pay data reports before May 8.
