California imposes annual pay reporting requirements on large employers
Despite significant progress in recent years to strengthen California’s equal pay laws, pay disparities along gender, racial, and ethnic lines in the private sector continue to exist. In response to this reality, California has enacted a new bill to identify inequities and encourage employers to mitigate unjustified pay and hiring practices.
Existing federal law requires private employers and federal contractors to file an annual Employer Information Report (EEO-1 Report) with the federal Equal Employment Opportunity Commission (EEOC). The EEO-1 Report had required workforce demographic data (employees broken down by gender, race/ethnicity, and job category) and pay data (wage information broken down by gender, race/ethnicity, and job category). In August 2017, the federal government suspended the pay data reporting component of the EEO-1 Report.
On September 30, 2020, Governor Gavin Newsom signed Senate Bill (SB) 973, requiring employers with 100 or more employees that are also required to file the federal EEO-1 Report to submit specified workforce pay data to the California Department of Fair Employment and Housing (DFEH). SB 973 is aimed at providing the state with tools to efficiently identify patterns of wage disparities, particularly as they relate to job segregation by gender and race, which could lead to the targeted enforcement of equal pay and antidiscrimination laws in California.
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