California Pay Data Reporting Updates

California Pay Data Report Filing Requirements for 2023 

California has taken significant steps towards promoting pay equity by requiring certain employers to submit annual pay data reports. The California Pay Data Reporting law (SB 973) aims to identify and rectify pay disparities by collecting and analyzing pay data from employers based on race, ethnicity, and gender. In this short blog, we will provide a brief overview of the California Pay Data Report filing requirements, helping employers understand their responsibilities and ensure compliance.

Who Needs to File?

Private employers with 100 or more employees and at least one employee in California are required to file the California Pay Data Report. These employers must also file the federal EEO-1 Report with the U.S. Equal Employment Opportunity Commission (EEOC).

There is a new report in 2023 for labor contract employees. Private employers with 100 or more labor contract employees and at least one labor contract employee in California are required to file an additional “Labor Contractor Employee Report” as part of their California Pay Data requirements. A “labor contract employee” is defined as:

An individual on a labor contractor’s payroll, including a part-time individual, for whom labor contractor is required to withhold federal social security taxes from that individual’s wages, and who performs labor for a client employer within the client employer’s usual course of business.

When and How to File?

The deadline for submitting the 2022 California Pay Data Report is May 10, 2023. Employers can submit their reports electronically through the California Department of Fair Employment and Housing’s (DFEH) online filing system.

What Information is Required for the California Pay Data Report?

The California Pay Data Report requires employers to submit the following information:

1. Pay Data: Employers must report the number of employees by race, ethnicity, and gender in each of the ten EEO-1 Job Categories. This data should be collected from a single pay period between October 1st and December 31st of the previous year, known as the “Snapshot Period.”
2. Compensation Bands: Employers must report the number of employees in each pay band, based on the W-2 Box 5 wages.
3. Hours Worked: Employers must report the total hours worked by each employee within each pay band, race, ethnicity, and gender group. This includes hours worked by exempt, non-exempt, full-time, and part-time employees.
4. Effective January 1, 2023, Senate Bill 1162 requires that all Payroll Employee Reports include the mean and median hourly rate of all groupings of employees with the same establishment, job category, race/ethnicity, and sex.

What Information is Required for the California Pay Data Labor Contract Employee Report?

The California Pay Data Labor Contract Employee Report requires employers to submit the following information (Government Code section 12999(a)(2) requires labor contractors to supply all necessary data to any client employer obligated to file a Labor Contractor Employee Report, and Government Code section 12999(f) permits any civil penalty to be awarded against a client employer for failure to file its report to be proportionally assessed against a labor contractor that failed to provide necessary data to that client employer.):

1. Pay Data: Employers must report the number of labor contract employees by race, ethnicity, and gender in each of the ten EEO-1 Job Categories. This data should be collected from a single pay period between October 1st and December 31st of the previous year, known as the “Snapshot Period.”
2. Compensation Bands: Employers must report the number of labor contract employees in each pay band, based on the W-2 Box 5 wages. If a labor contract employee has worked for more than one client employer over the course of the calendar year, their W-2 Box 5 wages should be allocated respectively to each client employer.
3. Hours Worked: Employers must report the total hours worked by each labor contract employee within each pay band, race, ethnicity, and gender group. If a labor contractor employee has worked for more than one client employer over the course of the calendar year, their hours worked should be allocated respectively to each client employer, based on the hours of work performed for that client employer.
4. Effective January 1, 2023, Senate Bill 1162 requires that all Labor Contractor Employee Reports include the mean and median hourly rate of all groupings of employees with the same establishment, job category, race/ethnicity, and sex.

Maintaining Compliance and Preparing for Future Requirements:

To ensure compliance with the California Pay Data Reporting law, employers should:

1. Review their current data collection and reporting processes, adjusting as needed to capture the required information.
2. Develop a timeline for gathering pay data, selecting a snapshot period, and submitting the report before the March 31st deadline.
3. Monitor updates and guidance from the DFEH to stay informed about any changes to the reporting requirements.
4. Consider conducting a proactive pay equity audit to identify and address potential pay disparities within the organization.

The California Pay Data Report is an essential tool for promoting pay equity and combating pay discrimination in the state. By understanding and complying with the filing requirements, employers can contribute to creating a more equitable workplace and reducing potential legal risks associated with pay disparities. Staying informed and proactive about pay data reporting will help California employers maintain compliance and foster an inclusive work environment.

Let Kairos Help

If you would like Kairos to help you with your California Pay Data Report Filing Requirements for 2023 or review your reports and compare them to your AAPs for consistency, please let us know as soon as possible.  If you would like us to prepare and submit your reports this year, please email for a quote today.