Employers of 100 or more employees to report to the California Civil Rights Department (“CRD”) pay and hours-worked data by establishment, pay band, job category, sex, race, and ethnicity.  The pay data reports are due by May 10, 2024.  This requirement applies to employers even if they are based outside of California, but have one employee (or even one employee hired through a labor contractor such as a staffing agency) working in California or assigned to an establishment in California.   

By requiring large employers to report pay data annually the Legislature sought to encourage these employers to self-assess pay disparities along gendered, racial, and ethnic lines in their workforce and to promote voluntary compliance with equal pay and anti-discrimination laws.

In addition, Senate Bill 973 authorized CRD to enforce the Equal Pay Act (Labor Code section 1197.5), which prohibits unjustified pay disparities. Moreover, the Fair Employment and Housing Act (Gov. Code § 12940 et seq.), already enforced by CRD, prohibits pay discrimination. The CRD states that the Employers’ pay data reports allow CRD to identify wage patterns and allow for effective enforcement of equal pay or anti-discrimination laws, when appropriate.

In 2022, the Legislature passed Senate Bill 1162 to enhance the California pay data reporting law in many aspects.  For example, private employers with 100 or more workers hired through labor contractors in the prior calendar year to report pay data for these workers and requiring more information about the employer’s workforce, such as median and mean wage information.  In addition, starting in the reports due on May 8, 2024, employers must also report whether employees worked remotely during the “Snapshot Period.” 

1. Pay data reports are due on May 8, 2024.

California requires employers to submit the pay data reports by the second Wednesday of May each year (which is May 8 in 2024).

The reports require employers to gather and report about median and mean hourly rate for each combination of establishment worked at, race, ethnicity, and sex within each job category, pay band, hours worked in 2023, as well as if the employee worked remotely.

Employers with 100 or more employees hired through contractors are required to submit a separate report for these employees.

2. Employers who must report.

Under Government Code section 12999(a)(1), a private employer that has 100 or more employees (anywhere as long as it has one employee in California) are required to submit a pay data report to the Civil Rights Division (CRD).  An employee is “an individual on an employer’s payroll, including a part-time individual, and for whom the employer is required to withhold federal social security taxes from that individual’s wages.” Gov. Code § 12999(k)(1).

3. Determining if an employer has 100 or more employees.

An employer has the requisite number of employees if the employer either employed 100 or more employees in the Snapshot Period or regularly employed 100 or more employees during the Reporting Year. “Regularly employed 100 or more employees during the Reporting Year” means employed 100 or more individuals on a regular basis during the Reporting Year. “Regular basis” refers to the nature of a business that is recurring, rather than constant. The CDR provides the following example: “In an industry that typically has a three-month season during a calendar year, an employer that employed 100 or more employees during that season regularly employed the requisite number of employees and would be required to file a pay data report with CRD.” 

The Snapshot Period is a single pay period between October 1 and December 31 of the Reporting Year.  For the reports due in 2024, the Reporting Year is 2023.  Employers may choose the single pay period between October 1 and December 31. The Snapshot period is used to identify the employees to be reported on in the pay data report. The employee does not have to be paid during the Snapshot period – it only matters whether the employee was employed during the Snapshot Period.

Employees located inside and outside of California are counted when determining whether an employer has 100 or more employees.

An employer with no employees in California during the Reporting Year is not required to file a pay data report.

Part-time employees, including those who work partial days and fewer than each day of the work week, are counted the same as full-time employees. 

Employees on paid for unpaid leave, including the California Family Rights Act (CFRA) leave, pregnancy leave, disciplinary suspension, or any other employer-approved leave of absence, must be counted.

Employers must include all employees assigned to California establishments and/or working within California.

4. Must include remote workers outside of California, but “assigned” to an establishment in California.

Starting for Reporting Year 2023, employers must report the number of employees in an employee group who worked remotely. The CDR explains, that a “remote worker refers to employees (payroll employees or labor contractor 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.”

Remote workers outside of California “assigned” to an establishment in California must be included in the employee pay data report.  The CDR provides the following example: If an employer has a single establishment in Riverside, California with 500 employees working from that location, the employer would submit a report covering all 500 employees. If 25 of these employees were working remotely (in California or beyond), the employer’s report would still cover all 500 employees.

5. When a Labor Contractor Employee Report must be filed.

Companies are required to file a separate Labor Contractor Employee Report if it had 100 or more employees hired through labor contractors in the prior calendar year anywhere with at least one worker based in California. 

“Labor contractor” – is defined as “an individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business.”  The CDR explains that a client employer’s “usual course of business” means the regular and customary work of the client employer. “Regular and customary work” means work that is performed on a regular or routine basis that is either part of the client employer’s customary business or necessary for its preservation or maintenance. “Regular and customary work” does not include isolated or one-time tasks.  The CDR provides the following example: Catering staff contracted to serve food at a trucking company’s tenth anniversary party would not be performing work within the client employer’s usual course of business, assuming catering a party is an isolated occurrence for the company.

The CDR explains that the pay data report only applies to employees hired through labor contractors, not 1099 workers. 

The Civil Rights Department California Pay Data Reporting website is here.

The CRD’s FAQs about the Pay Data Report is here.