Each year, California’s Department of Fair Employment and Housing (DFEH) requires private employers with 100 or more employees (at least one of which is in California) to report employee pay data. The primary purpose of this reporting is to reduce gender and racial pay gaps by 1) giving employers the opportunity to self-assess pay disparities and make proactive changes, and 2) identifying wage patterns that will permit the DFEH to enforce the Equal Pay Act along with Fair Employment and Housing Act antidiscrimination laws.
Although the information collected is similar to federal EEO-1 reporting, California is special so there are notable differences including the identification of three genders (male, female, nonbinary), reporting wages from Box 5 (instead of Box 1) on the W-2 form, and many others. The reported data must be sorted by establishment, job category, sex, race, and ethnicity using the DFEH online portal.
Last year was the first year California employers had to comply with this new pay data reporting obligation and the DFEH released those results on March 15th (aka Equal Pay Day). Coincidence? I don’t think so! Although California prides itself on its diversity, equity, and inclusion, unfortunately, the 2020 results revealed that pay disparities still remain between gender, race, and ethnicity for substantially similar work among large employers. The specific results can be located on the DFEH website.
Although this year’s data must be submitted by April Fool’s Day, missing the deadline is no joke. Currently, the DFEH is permitted to enforce the reporting requirement and then recover the costs of any enforcement. However, new legislation has been recently introduced (SB 1162) that proposes a monetary penalty to non-reporting employers of $100 per employee for the first violation and $200 per employee for subsequent violations. We will continue to watch this Bill and keep you apprised if it gets signed into law.