Employee Benefits Compliance

New EEO Requirement for California Employers

Authored by:

Vanessa L. Smith
Vantage Legal Solutions P.C.
Lisa Nelson
Leavitt Group Benefits Compliance

On September 30, 2020, Governor Gavin Newsom signed into law California Senate Bill 973, requiring employers to file a supplemental EEO report containing pay data. This new law is the technical equivalent of Component 2 of the EEO-1 report that was proposed at the federal level and subsequently rescinded.

Employers with 100 or more employees must provide a snapshot of pay data beginning March 2021 for the time period covering October 1 through December 31, 2020. Subsequent reports will be due annually in March for the full calendar year prior.

The report will be submitted to the Department of Fair Employment and Housing (yet to be provided on their website) and will include the number of employees by race, ethnicity, and sex in the standard 10 federal EEO categories. Required data includes previous W-2 earnings and hours for all employees, and salaries must be grouped into pre-determined pay bands from the Bureau of Labor Statistics.

Conclusion

There are outstanding questions in the law relating to whether it applies to employers with 100 employees in California or 100 employees overall, and whether only California employees should be reported. Nonetheless, as the initial filing date of March 30, 2021, will cover pay periods starting October 1, 2020, California employers should prepare now to ensure the accurate capture of data needed to timely submit the report. Employers should also consider conducting pay equity analysis to be aware of any pay issues prior to submitting the report and to develop a proactive plan to address the same. Once the DFEH releases the report submission link and information, additional links will be added to the DFEH website. Be sure to subscribe to the Leavitt Group news articles to stay up to date on this topic.

Consult with Leavitt Group’s preferred employment law firm, Vantage Legal, or another employment attorney of your choice to help navigate this new requirement and ensure your continued compliance.

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