An update is now available for Datatech’s HR and Payroll programs to assist with the new reporting requirements for CA Pay Data Reporting.* The deadline for reporting is May 10, 2023.
CA Pay Data Reporting has two reports:
• Payroll Employee Report
• Labor Contractor Employee Report
The instructions below will assist you with determining which reports you may be required to submit. They also provide step-by-step instructions to assist you with reviewing, editing, and exporting this data.
What Your Software Can Export
HR Software: Can edit, save, and export all the necessary data for both the Payroll Employee Report and the Labor Contractor Employee Report.
*Payroll Only: If you do not have our HR program, the Payroll software will generate and allow you to edit and export data for the Labor Contractor Employee Report. It will not save the EEO Job Category or Race/Ethnicity settings for each employee. This means each year you will have to re-enter this information. The CA Payroll Employee Report and Federal EEO-1 report are not part of the Payroll system. Those reports are only available in our HR software.
Please email Jason@DatatechAg.com if you are interested in adding our HR program.
Changes
SB-1162 Changes
Previously, the information that must have been included in the pay data report included the number of employees by race, ethnicity, and sex in specified job categories.
SB-1162 Change:
The SB-1162 change is that the pay data reports are also required to include the median and mean hourly rate for each combination of race, ethnicity, and sex within each job category.
How do I calculate an employee’s hourly rate?
Employers must calculate each employee’s individual hourly rate before calculating the mean and median hourly rates. The hourly rate is derived from an employee’s total annual earnings for the entire Reporting Year, as shown on the Internal Revenue Service Form W-2 Box 5. To calculate the hourly rate, divide the employee’s W-2 Box 5 income by the number of hours the employee worked.
SB-1162 requires labor contractors to “supply all necessary pay data to the private employer.” This means that in order for growers to file the Labor Contractor Employee report, Labor Contractors will have to submit a file with all of the necessary information to each of the growers they supply employees to. Penalties are assessable against labor contractors that have failed to provide required pay data to a client employer.
Labor Contractors should submit the necessary data to the client employers regardless of how many employees they supply to them, because the client employer may have other employees supplied by other labor contractors, which may add up to 100 employees total. If they do, they must submit a report, and the responsibility falls on the Labor Contractors to provide that data.
Datatech Software Changes
H2A Employees are not included in the report because they do not match the definition of an employee.
From the Pay Data Reporting FAQ: An employee is “An individual on an employer’s payroll, including a part-time individual, for whom the employer is required to withhold federal social security taxes from that individual’s wages. Employee may refer to a payroll employee, a labor contractor employee, or both.”
This has also been changed for the EEO-1 report.
Employees are selected based on Snapshot Period rather than Check Date.
Which Report Am I Required To Submit?
If you have more than 100 employees or hired more than 100 workers through labor contractors, you are now required to annually report pay, demographic, and other workforce data to the Civil Rights Department.
CA Pay Data Reporting has two reports:
• Payroll Employee Report
• Labor Contractor Employee Report
You will have to file one or both depending on how many employees or hired workers you had during the year. You must determine if you are required to report either the Payroll Employee Report, the Labor Contractor Employee Report, or both. To do so, carefully review which of the following situations apply to you.
EXAMPLES
These examples were taken from the CRD FAQ. Click here for the full help page.
Payroll Employee Report
Example: In 2022, ABC Company had 150 payroll employees in California and no workers hired through labor contractors. ABC Company is required to submit a Payroll Employee Report covering the 150 employees.
Labor Contractor Employee Report
Example: In 2022, DEF Company had 50 payroll employees and 200 workers hired through labor contractors, all in California. DEF Company is required to submit a Labor Contractor Employee Report covering the 200 labor contractor employees but not a Payroll Employee Report covering DEF’s payroll employees.
What if you used multiple labor contractors throughout the year?
If you used more than one labor contractor with a combined total of 100 or more workers, you will need to request this information from each labor contractor. Then you will need to manually combine all the information into one template and submit it to the state.
Both
Example: In 2022, GHI Company had 200 payroll employees and 100 workers hired through labor contractors, all in California. GHI Company is required to submit a Payroll Employee Report covering its 200 payroll employees and, separately, a Labor Contractor Employee Report covering the 100 labor contractor employees.
Penalties
Penalties for not reporting could be $100 per employee against an employer who fails to file a required report, with the penalties increasing to $200 per employee for a subsequent failure to file a required report.
We hope this has been helpful for you as you decide what to do regarding these new reporting requirements.
Questions
Review the CRD FAQ. Click here for the full help page.
Review the CRD’s CA Pay Data Reporting website page and User Guide.
If you have questions regarding your Datatech program, email Support@DatatechAg.com.