California Becomes First State to Require Employers to Report Employee Pay Data By Race and Gender

On September 30, 2020, California Governor Gavin Newson signed SB 973, making California the first state to require employers to submit employee pay data by race and gender.  As we previously reported, SB 973 is modeled after the now discontinued federal EEO-1 pay data collection form, which was harshly criticized for its heavy burden on employers and lack of utility in assessing for pay equity or pay discrimination (see prior Equal Pay Pulse blogs here, here, here, and here).

California’s new pay collection law goes into effect on March 31, 2021.  It requires California employers with 100 or more employees to submit a pay data report to the California Department of Fair Employment and Housing (“DFEH”) that discloses: (1) the number of employees by race, ethnicity, and sex in each of ten broad job categories, and (2) the number of employees by race, ethnicity, and sex whose annual earnings (defined as W-2 income) fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey.  Employers with multiple establishments must submit a consolidated report, as well as a report for each establishment.

For more details, see our earlier Equal Pay Pulse blog here.  We will continue to monitor developments with respect to SB 973, as well as any related legislation.  Stay tuned for updates.