Upcoming pay data reporting obligations in California have many employers struggling to gather and report employee race and ethnicity data. As a reminder, the filing deadline for employers with 100 or more employees is May 8, 2024.
One of the biggest stumbling blocks for reporting accurate pay data is the question of how employers are to gather the required information. The California Civil Rights Department (CRD) offers guidance on this issue through its FAQs.
According to the CRD, employee self-identification is the preferred method of identifying race/ethnicity information. Employers can offer employees the opportunity to self-identify during the onboarding process or during a survey period initiated by the employer ahead of the reporting period. It is important to note that any survey provided to employees must make clear that participation is voluntary.
A sample voluntary survey statement provided by the CRD (adapted from the EEOC) reads as follows:
“[Employer name] is subject to certain governmental recordkeeping and reporting requirements for the administration of civil rights laws and regulations. In order to comply with these laws, [employer name] invites employees to voluntarily self-identify their race or ethnicity. Submission of this information is voluntary and refusal to provide it will not subject you to any adverse treatment. The information obtained will be kept confidential and may only be used in accordance with the provisions of applicable laws, executive orders, and regulations, including those that require the information to be summarized and reported to the California government for civil rights enforcement. When reported, data will not identify any specific individual.”
Self-identifying may be the preferred method of providing the requested data, but what if an employee declines to participate?
If an employee declines to voluntarily provide their race/ethnicity, employers must still report the employee according to one of the seven race/ethnicity categories (see below), using (in the following order):
- current employment records;
- other reliable records or information; or
- observer perception.
Recognizing the risk of inaccurate race/ethnicity identification based on ‘observer perception’ alone, the CRD advises that this method only be used after making a good faith effort to obtain race/ethnicity information from the employee voluntarily or from other reliable records.
If using the observer perception method, the CRD encourages employers to utilize the clarifying remarks field to indicate they have done so, stating for example: “The race/ethnicity of [number] employees in this employee grouping is being reported based on observer perception.”
The seven race/ethnicity reporting categories are as follows:
- Hispanic/Latino
- Non-Hispanic/Latino White
- Non-Hispanic/Latino Black or African American
- Non-Hispanic/Latino Native Hawaiian or Other Pacific Islander
- Non-Hispanic/Latino Asian
- Non-Hispanic/Latino American Indian or Alaskan Native
- Non-Hispanic/Latino Two or More Races
These classifications have been adopted by the CRD from the EEOC’s method for race/ethnicity identification provided in its EEO-1 instruction booklet.
NOTE: For the 2023 Labor Contractor Employee Reports, employers must report the race/ethnicity of labor contractor employees.
Employers should visit the CRD’s Pay Data Reporting website for additional information, templates and training slides.