2024 California Pay Data Reporting: New Updates and Requirements

In anticipation of the upcoming May 8, 2024 deadline for California pay data reporting, the California Civil Rights Department (CRD) has unveiled a fresh set of guidelines for this year’s reports.

Since 2020, California has mandated that employers with at least 100 employees submit a pay data report to the CRD. This reporting requires annual submissions detailing pay and hours worked for employees either in California or who work for a California establishment. In 2022, the reporting requirements expanded to encompass the obligation to report on both “payroll employees,” who are on an employer’s payroll, and “labor contractor employees,” who are not on an employee’s payroll but are engaged in the employer’s typical operations. This year, the CRD will continue to collect both Payroll Employee Reports and Labor Contract Reports, but the CRD has implemented changes to the reporting templates, which require new or additional information. Regarding the May 8, 2024 deadline, the CRD has indicated it will not be granting or accepting any deferral requests.

A New User Guide

First and foremost, the CRD revamped its User Guide and associated templates for Excel and .CSV files. To properly file this year, employers must utilize only the most recent templates, as submissions in outdated formats will be rejected via the CRD’s portal. The CRD has refined the portal and templates, and it now allows users to hover their cursor on a column heading to see relevant instructions.

Reporting Requirements

a. Remote Workers

Employers are now required to report the number of employees per employee group who exclusively worked remotely during the designated period. For purposes of reporting, exclusively remote workers are defined as payroll or labor contractor employees who operated entirely from remote locations, excluding hybrid models involving both remote and in-person work. In particular, the data templates cover: 1) the number of onsite employees, 2) the number of remote employees based within California, and 3) the number of remote employees that work outside of California. In cases of uncertainty regarding the employee’s remote status, the employer’s headquarters should serve as the employee’s designated office.

b. Race/Ethnicity and Gender

Another important change to be aware of is that, while last year filers were able to report “unknown” for race, ethnicity, or gender of a labor contractor employee, they will no longer have that option. An employer must report on an individual employee’s race or ethnicity even if that employee opts not to voluntarily disclose such information. Employers may determine race or ethnicity by first using employment records or other reliable records. If that is not possible, they may choose to use observer perception, but should use the report’s “clarifying remarks” field to indicate that the employee is being reported based on observer perception. Similarly, when reporting gender, individual employees must self-identify whether they are male, female, or non-binary. If they decline to do so, employers must still report the employee’s gender, and may refer to current employment records or other reliable information.

Penalties

The penalties for employers that fail to file a required report can reach $100 per employee and increase to $200 per employee for a subsequent failure to file a required report. These penalties are also assessable against a labor contractor that failed to provide required pay data to a client employer in a timely fashion. The CRD has the authority to seek an order requiring a covered employer to submit a pay data report when it has failed to do so, and may also recover any costs associated with any enforcement action.

It is important that employers promptly begin preparing now to ensure timely compliance with these new requirements. If you have any questions, please contact one of Honigman’s Labor and Employment attorneys here.