SB 1302: California Pay Data Reporting Requirements
Understand your obligations under California's SB 1302. This guide provides a practical overview of the detailed data and submission process for employers.
California’s pay data reporting law, found in Government Code section 12999, requires certain employers to submit annual workforce data to the Civil Rights Department (CRD). The law’s objective is to identify and address pay disparities based on gender and race by promoting transparency in compensation practices. This annual reporting provides the state with data to analyze wage patterns and enforce anti-discrimination and equal pay statutes.
Determining if the Law Applies to Your Business
To determine if your business must comply, you must assess your workforce size during the prior calendar year. The law applies to private employers meeting one of two thresholds. The first covers employers with 100 or more payroll employees. If your business is part of an integrated enterprise with affiliated companies, you must combine the employee totals from all entities to see if this threshold is met.
The second threshold applies to businesses that utilized 100 or more workers provided by third-party labor contractors in the preceding year. For both thresholds, the count includes all workers nationwide, as long as the employer has at least one payroll employee or contracted worker based in California. An employer can meet one or both criteria, which would require submitting one or two separate reports, respectively.
Information Required for the Pay Data Report
Both the Payroll Employee and Labor Contractor reports require employers to categorize each individual by job category, race, ethnicity, and sex. You must also report the total hours each person worked during the year and calculate the mean and median hourly rate for each combination of these demographic groups.
For job classifications, each employee must be assigned to one of ten EEO-1 categories:
- Professionals
- First/Mid-Level Officials and Managers
- Executive/Senior-Level Officials and Managers
- Technicians
- Sales Workers
- Administrative Support Workers
- Craft Workers
- Operatives
- Laborers and Helpers
- Service Workers
Payroll Employee Report
To prepare this report, you must first select a “Snapshot Period,” which is a single pay period between October 1 and December 31 of the prior year, to identify the employees to include. For compensation, you will use the pay bands established by the U.S. Bureau of Labor Statistics. Each employee is assigned to a pay band based on their annual earnings as reported in Box 5 of their Form W-2.
For non-exempt, hourly workers, total hours worked are calculated from timesheet records. For salaried, exempt employees, you must provide a reasonable estimate of their hours worked throughout the year.
Labor Contractor Employee Report
If you meet the threshold for reporting on labor contractor employees, you must prepare a separate report. The client employer is responsible for obtaining the necessary data from the labor contractors they work with. A key requirement for this report is to disclose the name of the labor contractor who supplied the workers. The hourly pay rate for contracted workers is determined by dividing their total pay for the year by the total hours they worked.
The Submission Process for the Pay Data Report
All pay data reports must be filed electronically through the CRD’s dedicated online portal. Employers must register for an account and use the standardized Excel or .CSV templates provided by the CRD to format their data. Paper submissions are not accepted.
After populating the template, you will upload the file to the reporting portal. The portal has a validation feature that scans the submission for common errors, such as missing data or incorrect formatting. If the system detects errors, it will provide a notification detailing the issues that need to be corrected before the report can be accepted.
The final step is certification, where an authorized company representative must formally attest that the information is accurate and complete. The annual deadline for submission is the second Wednesday of May. Upon successful submission, the portal will issue a confirmation receipt that you should save for your records.
Penalties for Non-Compliance
Failure to file the required pay data report by the deadline can lead to significant civil penalties. For an initial failure to file, the CRD can assess a penalty of up to $100 per employee. If an employer fails to file in a subsequent year, the penalty increases to up to $200 per employee. These penalties can be assessed against an employer for failing to file or a labor contractor who fails to provide the required data to a client employer.
Beyond fines, the CRD can seek a court order to compel a non-compliant employer to submit the report. This legal action can result in additional costs and bring further scrutiny to the employer’s pay practices.