More Transparency: California Civil Rights Department Issues Additional Guidance on Pay Data Reporting
To help employers comply with the pay data requirements, the California Civil Rights Department (CRD) has now published updated FAQs for pay data reporting.
The updated FAQs seek to provide clarity that many employers were waiting for with respect to employee’s hired through a staffing agency and other topics. Below are some of the questions posed and a summary of the CRD’s guidance.
How should employers report for staffing agency employees? The FAQs clarify that employers must submit a separate pay data report for workers hired through a staffing agency when the work performed is within the client employer’s usual course of business. This aligns with the reporting obligation to mirror California’s independent contractor test. The FAQs also confirm the applicable “Snapshot Period.” Similar to direct employees, the “Snapshot Period” for staffing agency employees is a single pay period between October 1 and December 31 of the reporting year. There was uncertainty about whether this period would be broader due to the often transitory nature of staffing agency employees. Finally, when reporting staffing agency employees, employers must list the number of contractors hired (and the aggregate number of hours they worked in 2022) by establishment, job category, race/ethnicity, sex, and pay band.
What about staffing agency employees who telework? A client employer’s report must include establishments outside of California if any staffing agency employee assigned to that establishment is working from California during the relevant Snapshot Period. Similarly, if the staffing agency employee is working outside of California for a but are assigned to an establishment within California, they must also be included on the report.
How do employers calculate the median and mean hourly wages? The calculation is based on the employee’s total hours worked and total pay received in 2022—it does not use the employee’s assigned hourly wage.
What pay data does the labor contractor have to provide? Employers are expected to only report the portion of staffing agency employee’s annual wages and hours worked attributable to work performed for that employer. It is the staffing agency’s burden to divide this pay and hours worked information for the employer.
Do employers need to provide race/ethnicity data for staffing agency employees? While the new law clearly provides that staffing agencies must provide employers with the necessary pay data for the labor contractor employee report, there was ambiguity on whether this would include demographic information. According to the FAQs, the obligation to collect and report on staffing agency employee race/ethnicity and sex data seems to fall on the employer not the staffing agency. Although, the FAQs make clear that the CRD is permitting employers to report unknown race/ethnicity or sex for staffing agency employees when that information is unknown and not reasonably obtainable before the filing deadline—but this leeway may not last.
While the requirements remain complicated, the FAQs make compliance a bit clearer. If you require assistance in completing pay data reports, please do not hesitate to reach out to your Stradling attorneys for assistance.
