Six Weeks To Go Until California’s Pay Data Reporting Deadline – Employee Rights/ Labour Relations

Seyfarth Synopsis: The reporting deadline
for the 2023 California pay data reporting cycle is only six weeks
away. Employers with at least 100 employees with at least one
California employee must file their Pay Data Report with the
California Civil Rights Department (CRD) by May 8, 2024. While the
reporting requirements are largely the same as the 2022 reporting
requirements, the CRD now requires information on remote workers
and labor contractor demographic data.

With California’s May 8, 2024, pay data reporting deadline
right around the corner, California employers should ensure
compliance with the CRD’s reporting requirements. To help with
these obligations, here is your helpful summary of the CRD’s
recent changes requiring reporting on remote workers and labor
contractor demographic data that you did not have to deal with the
last time around.

What Do I Need to Know About Remote Workers?

New for the 2023 reporting cycle is a requirement that both
payroll and labor contractor employee reports include information
regarding the number of employees per employee group who worked
remotely. Specifically, the data templates ask for:

1. the number of employees that do not work remotely,




2. the number of remote employees located within California,
   and




3. the number of remote employees located outside of
   California.

This has been a sizable undertaking for many employers who do
not necessarily maintain this information in an easily accessible
format.

The recently published CRD Frequently Asked
Questions define a “remote worker”
as “a payroll or labor contractor employee who is entirely
remote, teleworking, or home-based, and has no expectation to
regularly report in person to a physical establishment to perform
work duties.”

Many workplaces utilize hybrid working models in which employees
split time between the physical office and their home. For hybrid
employees or those who are in a “(partial) teleworking
arrangement,” a common question that has arisen is how to
approach reporting and whether the individual qualifies as a remote
worker. The FAQs explain that “employees in hybrid roles or
(partial) teleworking arrangements expected to 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.”
Therefore, the key consideration is the employee’s status and
work location during the Snapshot Period (i.e. a single pay period
between October 1, 2023 and December 31, 2023).

Do I Need Labor Contractor Demographic Data This Year?

The short answer to this common question is, “yes.”
Last year, the CRD granted an exception that permitted using
“unknown” for race, ethnicity, or sex of labor contractor
employees. However, “unknown” is no longer an acceptable
response and demographic data is now required for labor contractor
employees.

The CRD provides a few options for collecting this information,
the preference being voluntary self-identification. If a worker
declines to provide the information, employers must use one of
three other options provided by the CRD: (1) current employment
records, (2) other reliable records or information, or (3) observer
perception. The CRD explicitly acknowledges the risk of inaccurate
data using the observer perception, and instructs employers that
observer perception should be a last resort.

What Are The Penalties?

There are a number of enforcement mechanisms for employers who
fail to comply with the pay data reporting requirements. The CRD is
actively pursuing non-filers and has already issued fines to
companies that fail to file the required reports. To that end, the
Department has the authority to seek:

1. Civil Penalties: Employers who fail to file a
   required report can be assessed penalties of $100 per employee. The
   penalties increase to $200 per employee for a subsequent failure to
   file a required report and may also assessed against a labor
   contractor for failing to timely provide pay data necessary to
   complete the required filing.




2. An Order to File: The CRD may seek an order
   requiring an employer to file a required pay data report;




3. Recovery of Costs: The CRD may recover its
   costs in any enforcement action.

Accordingly, employers should take care to timely file the
required reports.

CRD Pay Reporting Resources

As we previously wrote, the CRD has
made several resources available to assist employers with their pay
reporting obligations, including:

Workplace Solutions

Given the new reporting obligations, covered employers should
ensure they have all required categories of data ready to submit
for the upcoming deadline. Please contact the author or your
favorite Seyfarth attorney with any questions about complying with
California’s pay reporting requirements.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.