The Advisors' Blog

– Liz Dunshee

Here’s another reason to get your arms around your “equal pay” data – especially if you have a large employee base in California. The legislature there has passed Senate Bill 973, which if signed into law by Governor Newsom would require California employers with 100 or more employees to submit annual pay data reports to the state, similar to what would’ve been required at the federal level if the EEO-1 Component 2 data reporting requirement hadn’t died last year. This Skadden article walks through how SB 973 would work – here’s an excerpt:

Modeled after the now defunct EEO-1 Component 2 data reporting requirement, SB 973 would require that California employers with 100 or more employees submit annual pay data reports to the state’s Department of Fair Employment and Housing. California employers’ annual reports would include the following information: (A) the number of employees by race, ethnicity and sex broken down into nine specified job categories; (B) the number of employees by race, ethnicity and sex whose annual earnings fall within specified pay bands; (C) the total number of hours worked by each employee counted in each pay band during the reporting year; (D) for employers with multiple establishments, a report for each establishment and a consolidated report that includes data on all employees; and (E) any clarifying remarks regarding the information provided, which is optional.

The article notes that SB 973’s express intent is to allow for more targeted enforcement efforts against companies who may be engaged in discriminatory pay practices. That heightens the stakes for companies to not only conduct equal pay audits, but to understand the data that’s gleaned from that process and adequately correct shortcomings (as I’ve blogged, that can be complicated).

The article also notes that although SB 973 adds a compliance rationale for California businesses to address this issue, shareholders and other stakeholders are pushing for pay equity even outside the borders of the Golden State. For help in navigating all these demands, mark your calendars for our November 19th webcast on this topic – “Pay Equity: What Compensation Committees Need to Know.”