California’s New Pay Equity Data Reports Due March 31On January 25, 2021 by Schnader in Labor and Employment
Scott J. Wenner published a client alert, “California’s New Pay Equity Data Reports Due March 31.”
Last fall, late on the final day he was permitted to sign legislation under California law, Governor Gavin Newsom affixed his signature to SB 973, a law that imposes on covered employers a significant employee data reporting requirement. All private employers who are required to prepare and file annual EEO-1 forms (Employer Information Report) and employ any employees in California must file the new reports annually with the Department of Fair Employment & Housing (DFEH). This new law has been codified as section 12999 of the California Government Code.
The data reporting requirement purportedly is intended to help achieve equal pay for women and persons of color by mandating the collection and submittal to the DFEH by covered employers of data that can be used by the DFEH “to investigate, conciliate, mediate, and prosecute complaints alleging practices made unlawful by [the Fair Employment & Housing Act].” (SB 973, Sec. 2(f)(3)). Its premise is that potential public disclosure by the DFEH of employers whose data suggest pay inequality in their workforces based on race, sex or ethnicity will prompt compliance with California’s Fair Pay Act — California’s equal pay law that became effective in 2016. Echoing the language of Sec. 1 of SB 973, the DFEH maintains that mandatory reporting of pay data by sex, race and ethnicity will both help trigger voluntary pay equity efforts and “allow DFEH to more efficiently identify wage patterns and allow for effective enforcement of equal pay or anti-discrimination laws, when appropriate. DFEH’s strategic vision is a California free of discrimination.”