California Pay Data Reporting – SB 973

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California Pay Data Reporting – SB 973

  • By: Sophia Meyer

California employers of 100 or more employees must report pay and hours-worked data by establishment, job category, sex, race and ethnicity to the Department of Fair Employment and Housing (DFEH) by March 31, 2021, and annually thereafter.  

The “snapshot period” for reporting is a single pay period between October 1 and December 31 of the Reporting Year.  An employer has the requisite number of employees if the employer either employed 100 or more employees in the snapshot period chosen by the employer or regularly employed 100 or more employees during the Reporting Year.  Employees located inside and outside of California are counted when determining whether an employer has 100 or more employees.   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.  

The legislative intent behind SB 973 is to collect data in an effort to strengthen California’s equal pay laws.  The justification of the legislation pointed out that “despite significant progress made in California in recent years ... the gender pay gap persists, resulting in billions of dollars in lost wages for women each year.”   The Legislature further opined that “although there are legitimate and lawful reasons for paying some employees more than others, pay discrimination continues to exist, is often “hidden from sight,” and can be the result of unconscious biases or historic inequities.”  “This pay discrimination also harms families and the state’s economy.”

The Legislature is hopeful that a system where large employers report pay data annually will encourage these employers to self-assess pay disparities along gendered, racial, and ethnic lines in their workplaces and promote voluntary compliance with equal pay and anti-discrimination laws.  

SB 973 was approved by Governor Newsom on September 30, 2020 and authorizes the DFEH to receive, investigate, conciliate, mediate, and prosecute complaints alleging practices unlawful under discriminatory wage rate provisions of the Equal Pay Act (Labor Code section 1197.5).  

While the California Public Records Act would typically require DFEH to make the reporting documents available for review or inspection by the public, SB 973 specifically exempts any individually identifiable information submitted to the DFEH pursuant to SB 973 from disclosure and makes it confidential under the law.  

The DFEH is working on their pay reporting portal and templates for reporting information.  Now is a good time to check with your agency’s legal team to ensure you have the information ready to submit in an acceptable format before March 31, 2021.