Professional Employer Organizations and CA Pay Data Reporting

February 10, 2021 Robert Sheen

PEO and CA Pay Data Reporting

3 minute read

The deadline for submitting California pay data reports under SB 973 is rapidly approaching. By March 31, 2021, certain employers with California-based employees (including remote workers that report to California locations) must submit comprehensive pay data reports to the Department of Fair Employment and Housing (DFEH). These reports encompass information such as the following:

  • Number of employees by race, ethnicity, and sex, in each of the following job categories: executive or senior-level officials and managers, first or mid-level officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers; 
  • Number of employees by race, ethnicity, and sex in each of the pay bands used by the U.S. Bureau of Labor Statistics and used in the Occupational Employment Statistics survey; and 
  • Total hours worked for each employee in each pay band.

To support covered employers in this new compliance obligation, the DFEH has been consistently updating its Pay Data Reporting Frequently Asked Questions site. A recent update to the FAQs, concerns professional employer organizations (PEOs).

For employers that rely on PEOs for compliance obligations, the Pay Data Reporting FAQs distinguish the function of PEOs in the reporting process. Specifically, a PEO may prepare and file a pay data report on behalf of a client. Notably, the client must certify the accuracy of the report, not the PEO. This creates extra concerns for businesses without the internal capabilities to create and submit pay data reports. 

It turns out the clear delineation of roles may actually be a benefit to employers. While PEOs can support employers in many aspects of their operations, pay data reporting requires expertise, both in equal pay laws and regulations, as well as data wrangling, that goes above and beyond the day to day compliance activities. This is because the new law is intended to establish strict, enforceable consequences for employers who engage in pay discrimination.

In addition to the provisions authorizing the DFEH to promulgate regulations to carry out SB 973, the DFEH also has express authority “to receive, investigate, conciliate, mediate, and prosecute complaints alleging practices made unlawful pursuant to Section 1197.5 of the Labor Code,” which is California’s Equal Pay Act. This includes the authority to issue subpoenas to require attendance at deposition and produce documents, to serve interrogatories and document requests, and to seek a court order to compel their compliance.  

The bottom line is that while organizations may rely on their PEO for support, in preparing and filing pay data reports, a vendor with specific pay equity expertise may be required because of the extra enforcement concerns. The right vendor can work in tandem with your PEO to ensure accurate pay data reporting that minimizes the risk to your organization. Employers should keep in mind the Triangle of TrustSM: trust in data, trust in software, and trust in regulatory expertise. Click here to find out more about how Trusaic can help your organization achieve its pay equity goals. 

You can download and read our free white paper on pay data reporting here

To learn more about achieving pay equity, click here.

The post Professional Employer Organizations and CA Pay Data Reporting first appeared on PayParity.

Previous Article
California Pay Data Reporting Most Commonly Asked Questions
California Pay Data Reporting Most Commonly Asked Questions

2 minute read On September 30, 2020, California Governor Gavin Newsom signed Senate Bill 973 (“SB 973”) int...

Next Flipbook
Get To Know Oregon Equal Pay
Get To Know Oregon Equal Pay

Download our Get to Know the Oregon Equal Pay Act guide to learn how to comply with the law and the penalti...