California Pay Data Reporting: Part II – Pay and Hours Worked
Part I of this series was a basic overview of the new California data reporting program, including thresholds for employer coverage and which employees must be reported. In Part II we’ll discuss how to calculate and report pay and hours worked for exempt and non-exempt employees.
Additional General Background
The DFEH Pay Data Reporting Portal (www.dfeh.ca.gov/paydatareporting) opened for data submission effective February 16. There are two options for filing: (1) uploading a data file in Excel or .csv; or (2) a fillable form for manually entering data. For reporting employees in an establishment, use the same establishment(s) that already exist for federal EEO-1 Reports. Unlike the EEO-1 program, however, there is no exception for establishments with fewer than 50 employees – workers at small headcount offices or other facilities must be reported.
A common question in this COVID telecommuting era is how remote workers are impacted by the California reporting program. A remote worker must be reported if there is a direct connection to California – he/she lives in California but works elsewhere, or resides elsewhere but works in or reports to a California establishment. For example, a manager who resides in California with a Southwest sales territory for a Michigan manufacturer; or an IT help desk worker who resides in Chicago but reports to and supports a Los Angeles bank.
Pay and Bands Reporting
For all employees to be reported, data on the number of individuals must be entered into a pay band by race/ethnicity, gender and EEO Code.
- Race/ethnicity are the same seven (7) categories used in an EEO-1 Report.
- EEO Codes are also the same as for EEO-1 Reports (e., Professionals, Administrative Support, Craft Workers, Operatives, etc.).
- Three (3) gender categories are available in the California Pay Data Report – female, male and non-binary. However, since “non-binary” is not a category used in EEO-1 Reports or Affirmative Action Plans, fewer employers may be capturing this as a self-ID option.
Similar to the former EEO-1 Component 2 program there are twelve (12) pay bands into which each employee must be placed, ranging from “$19,239 and under,” up to “$208,000 and over.” The earnings figure to use for slotting each employee is the amount listed in the individual’s 2020 W-2 Box 5 – Medicare wages and tips. The total number of employees in each pay band is entered.
Hours Worked Reporting
Aggregate hours worked for the total number of employees in each race/ethnicity, gender, EEO Code and pay band must also be entered into the Pay Data Report. This includes all hours worked, and non-working paid time off such as paid vacation, sick time, holidays and paid leaves.
For non-exempt employees, this information is taken from payroll records of actual time worked and paid time off. The total hours for each employee in the respective report ‘cell’ are aggregated together and entered into the Pay Data Report.
For exempt employees, there is a choice for reporting hours worked. An employer can report actual hours worked and paid time off, if tracked similarly to non-exempt workers. More commonly, a proxy method may be used by calculating the number of days worked (plus paid days off) multiplied by the average number of hours worked per day. Unlike the EEO-1 Component 2, there is no fixed proxy formula. Thus, the proxy calculation does not have to be the same for every exempt employee. For example, a non-manager exempt professional could be assigned an average of 8 hours per day, while 10 hours per day could be used for a director or officer and above. However, a standard proxy of 2080 hours for each full time exempt worker is acceptable.
As you can see, an enormous number of individual ‘cells’ exist for entering California Pay data: 7 race/ethnicity X 10 EEO Codes X 3 genders X 12 pay bands for each = 2,520 possible ‘cells’ on the Report for pay and aggregate hours worked data.
In Part III we’ll cover some additional details about the logistics of navigating the Pay Data Report online portal to California’s Department of Fair Employment and Housing.
Contact the authors or your Miller Johnson Employment attorney with any questions.