Under California’s pay data reporting obligations, employers with 100 or more employees must prepare and file reports by May 8, 2024.  Employers are required to gather and report employee race and ethnicity data, among other items.  However, many employers do not have records detailing employee’s race and ethnicity, so how can this information be gathered?  California’s Civil Rights Department (CRD) explains in their FAQs, how employers may collect this information.

Understand the Reporting Categories

The initial step for employers is to understand the seven race/ethnicity categories that must be reported on. These categories are:

  1. Hispanic/Latino
  2. Non-Hispanic/Latino White
  3. Non-Hispanic/Latino Black or African American
  4. Non-Hispanic/Latino Native Hawaiian or Other Pacific Islander
  5. Non-Hispanic/Latino Asian
  6. Non-Hispanic/Latino American Indian or Alaskan Native
  7. Non-Hispanic/Latino Two or More Races

These classifications are adopted from the federal EEO-1 survey to maintain consistency with federal reporting and facilitate the process for employers.  In the past, employers could report “unknown,” but this is not an option for employers reporting in 2024. 

Employee Self-Identification

The CRD explains that the preferred method for collecting this data is employee self-identification. Employers should provide employees the option to voluntarily disclose their race or ethnicity. The CRD provides the following sample statement that employers can use when approaching employees:

“[Employer name] is subject to certain governmental recordkeeping and reporting requirements for the administration of civil rights laws and regulations. In order to comply with these laws, [employer name] invites employees to voluntarily self-identify their race or ethnicity. Submission of this information is voluntary and refusal to provide it will not subject you to any adverse treatment. The information obtained will be kept confidential and may only be used in accordance with the provisions of applicable laws, executive orders, and regulations, including those that require the information to be summarized and reported to the government for civil rights enforcement. When reported, data will not identify any specific individual.”

Address Non-Disclosure

If an employee chooses not to self-identify, employers must still classify the employee under one of the specified race/ethnicity categories. The CRD explains that employers should attempt to gather the employee’s race/ethnicity based on the following (in this order):

  • by using current employment records,
  • other reliable records or information, and
  • as a last resort, observer perception.

Use of Observer Perception

When observer perception is used, it is important to acknowledge the potential for inaccuracies. Employers are encouraged to document the use of observer perception in the clarifying remarks field of their reports. An example statement is: “The race/ethnicity of [number] employees in this employee grouping is being reported based on observer perception.”  However, employers are not required to provide this statement in the clarifying remarks. 

By following these guidelines, employers can effectively comply with reporting requirements while respecting their employees’ privacy and promoting an inclusive workplace culture. Remember, the ultimate goal of collecting this data is to foster an environment of fairness and equality in employment practices.