As the 2023 California pay data reporting cycle begins, a look at a recent California Civil Rights Department (CRD) pay data reporting enforcement action provides a helpful reminder of the potential risk that exists for employers that fail to file required reports.
- Private employers with one hundred or more employees in the United States with at least one employee working in California are required to file payroll employee and labor contractor employee reports each year.
- Employers are subject to a penalty of $100 per employee for a first violation and $200 per employee for a second violation for failing to file.
- The California Civil Rights Department enforces the pay data filing requirement and is allowed to collect penalties and recover costs.
- The CRD’s public discussion of its efforts to enforce the filing requirement suggests that it will continue to pursue non-filers.
On July 5, 2023, the CRD announced that it had sued Cambrian Homecare, Inc., for failing to report employee pay data. The CRD stated that Cambrian Homecare had failed to file the required pay data reports “[d]espite repeated warnings.”
According to the CRD’s petition to compel, Cambrian Homecare did not file California pay data reports for the years 2020, 2021, and 2022, even after the CRD sent several failure-to-file notices and requested reports be filed. When the petition was filed on July 5, 2023, no reports had been filed for the three years since the payroll employee reporting requirement was established. On October 2, 2023, the CRD announced a settlement with Cambrian Homecare, noting that the company had agreed to pay approximately $100,000 and to make timely pay data filings in the future. The stipulation for entry of final judgment provides several interesting details, including that Cambrian Homecare filed all three years of previously unfiled reports within three weeks of being sued by the CRD. The filing showed that Cambrian Homecare agreed to pay a penalty of $70,000 for failing to submit its 2022 pay data report and to pay the CRD $24,778 for its costs in the litigation. Cambrian Homecare agreed to file all required future pay data reports “on or before the deadline annually” and agreed that the court would retain jurisdiction to enforce the terms of the stipulated judgment for three years.
As we enter the 2023 pay data report period, this enforcement action is a reminder that the California pay data reporting requirement has broad coverage applying to any employer with one hundred or more payroll employees with at least one employee working in California. Beginning with the 2022 reporting cycle, employers that fail to file reports are subject to a penalty of $100 per employee for a first violation and $200 per employee for a second violation. In addition to recovering these penalties, the CRD can also recover its costs when compelling employers to file these reports. In light of the upcoming filing deadline of May 8, 2024, for 2023 pay data, employers may want to assess their preparations to file the 2023 payroll employee and labor contractor employee pay data reports.
Ogletree Deakins’ OFCCP Compliance, Government Contracting, and Reporting Practice Group will continue to monitor developments with respect to California pay data reporting and will provide updates on firm’s California, OFCCP Compliance, Government Contracting, and Reporting, and Pay Equity blogs.
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