SB 973 – Authorizes The DFEH To Investigate And Prosecute Complaints Alleging Discriminatory Wage Rate Practices And Requires Employers With 100 Or More Employees To Submit An Annual Pay Data Report To The DFEH

CATEGORY: Nonprofit News
CLIENT TYPE: Nonprofit
DATE: Oct 22, 2020

Current law establishes within the Department of Industrial Relations the Division of Labor Standards Enforcement, which is vested with the general duty of enforcing various labor laws, including provisions prohibiting wage rates that discriminate on the basis of gender or race. SB 973 authorizes the Department of Fair Employment and Housing (DFEH) to receive, investigate, conciliate, mediate, and prosecute complaints alleging practices unlawful under those discriminatory wage rate provisions.  AB 973 further requires the DFEH, in coordination with the division, to adopt procedures to ensure that the departments coordinate activities to enforce those provisions.

AB 973 further requires private employers with 100 or more employees to submit an annual pay data report with specified wage information to the California Department of Fair Employment and Housing on or before March 31, 2021, and on or before March 31 each year thereafter. 

The report must include the number of employees by race, ethnicity, and sex by job category using the same job categories on the federal EEO-1 form. For purposes of establishing the numbers required to be reported, an employer must create a “snapshot” that counts all of the individuals in each job category by race, ethnicity, and sex, employed during a single pay period of the employer’s choice between October 1 and December 31 of the Reporting Year.  The report also requires employers to provide the number of employees by race, ethnicity, and sex whose annual earnings fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey. For purposes of establishing the numbers to be reported, the employer must calculate the total earnings, as shown on the Internal Revenue Service Form W-2, for each employee for the entire Reporting Year, regardless of whether or not an employee worked for the full calendar year. The report must include the total number of hours worked by each employee in each pay band during the “Reporting Year.”

Employers with multiple establishments in the state are required to file a report for each establishment, as well as a consolidated report.

An “Employee” for purposes of AB 973 means an individual on an employer’s payroll, including a part-time individual, whom the employer is required to include in an EEO-1 Report and for whom the employer is required to withhold federal social security taxes from that individual’s wages.

AB 973 requires the DFEH to maintain the pay data reports for a minimum of 10 years and makes it unlawful for any officer or employee of the DFEH or the division to make public in any manner any individually identifiable information obtained from the report prior to the institution of certain investigation or enforcement proceedings, as specified.   AB 973 further requires the Employment Development Department to provide DFEH, upon its request, as specified, with the names and addresses of all businesses with 100 or more employees.

(Amends Section 12930 of, and adds Chapter 10 (commencing with Section 12999) to Part 2.8 of Division 3 of Title 2 of, the Government Code.)