And, what will the government do with this data? The stated intent of the law is to identify and remedy pay inequities and strengthen current equal pay laws. The new legislation permits the DFEH to use the data collected to prosecute complaints alleging discriminatory wage practices under the Equal Pay Act (California Labor Code § 1197.5). Moreover, the DFEH is authorized to share the reports with the Division of Labor Standards Enforcement (“DLSE”), so the DLSE can identify wage patterns and institute litigation to challenge suspected discriminatory practices. In other words, rather than the government responding to complaints from employees, or investigating targeted industries, it will now evaluate all data submitted by large employers and decide whether enforcement action is warranted.
The legislation provides that reported data will be kept confidential and not subject to disclosure under the Public Records Act. The DFEH, however, may compile, publish, and publicize aggregate reports based on the data it receives, so long as the aggregate reports are reasonably calculated to prevent the association of any data with any individual business or person. The data may be used for investigation and enforcement proceedings by the DFEH and the DLSE under the Fair Employment and Housing Act and Labor Code, respectively. Of course, parties to private litigation will likely seek discovery of reported data as well.
SB 973 essentially mirrors an Obama-era pay data collection rule issued by the Equal Employment Opportunity Commission, which was later stayed by the Trump administration. Of course, it remains to be seen whether our new administration will revive these collection efforts at the federal level, but for now, California remains willing to carry the torch.
If you have any questions about your pay practices or these new California reporting requirements under SB 973, please contact a member of our Labor & Employment team.
The one issue left unanswered by Judge Chutkan’s March 4 Order was when the Equal Employment Opportunity Commission (“EEOC”) was required to collect the employee pay data. This morning, Judge Chutkan, held that the Commission had to collect the data by September 30, 2019. The EEOC has indicated it will make the collection portal available by July 15 and provide information and training to employees prior to that date.
The clock is ticking and, absent a successful appeal of Judge Chutkan’s March 4 decision, employers should now be collecting the data required to be included in the EEO-1 form and be prepared to file those reports on or before September 30. Members of our Firm’s Labor & Employment Practice Group are available to assist in navigating the EEO-1 Form.