Amended  IN  Assembly  July 05, 2019
Amended  IN  Senate  April 09, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 171

Introduced by Senator Jackson

January 28, 2019

An act to add Chapter 10 (commencing with Section 12999) to Part 2.8 of Division 3 of Title 2 of the Government Code, relating to employment.


LEGISLATIVE COUNSEL'S DIGEST


SB 171, as amended, Jackson. Employers: annual report: pay data.
Existing law establishes the Department of Fair Employment and Housing within the Business, Consumer Services, and Housing Agency to enforce civil rights laws with respect to housing and employment and to protect and safeguard the right of all persons to obtain and hold employment without discrimination based on specified characteristics or status.
Existing law establishes within the Department of Industrial Relations the Division of Labor Standards Enforcement, which is vested with the general duty of enforcing various labor laws.
Existing federal law requires specified companies to file with the federal Equal Employment Opportunity Commission an annual Employer Information Report (EEO-1) that contains specified data regarding demographics of the employer’s workforce.
This bill would require, on or before March 31, 2021, and on or before March 31 each year thereafter, a private employer that has 100 or more employees and who is required to file an annual Employer Information Report under federal law, to submit a pay data report to the Department of Fair Employment and Housing that contains specified wage information. The bill would require the department to make the reports available to the Division of Labor Standards Enforcement upon request. The bill would authorize the department, if the department does not receive the required report from an employer, to seek an order requiring the employer to comply, as specified. The bill would require the department to maintain the pay data reports for a minimum of 10 years and would make it unlawful for any officer or employee of the department or the Division of Labor Standards Enforcement to make public in any manner whatever any individually identifiable information obtained from the report prior to the institution of certain investigation or enforcement proceedings, as specified.
The bill would make legislative findings in support of these provisions.
The California Public Records Act requires a public agency to make public records available for inspection, unless an exemption from disclosure applies.
This bill would provide that any individually identifiable information disclosed submitted to the department pursuant to this bill be considered confidential information and not subject to disclosure pursuant to the California Public Records Act, except as specified.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Despite significant progress made in California in recent years to strengthen California’s equal pay laws, the gender pay gap persists, resulting in billions of dollars in lost wages for women each year in California.
(b) Pay discrimination is not just a women’s issue, but also harms families and the state’s economy. In California, in 2016, women working full time, year round made a median 88 cents to every dollar earned by men, and for women of color, that gap is far worse.
(c) Although there are legitimate and lawful reasons for paying some employees more than others, pay discrimination continues to exist, is often “hidden from sight,” and can be the result of unconscious biases or historic inequities.
(d) Recognizing that pay discrimination is difficult to detect and address, the Obama Administration announced a proposed revision to the Employer Information Report (EEO-1) to include the reporting of pay data by gender, race race, and ethnicity beginning in 2018. However, in August 2017, the Trump Administration put a halt to the implementation of this new rule.
(e) It is the intent of the Legislature, in enacting this bill, to ensure that this pay data will continue to be compiled and aggregated in California.
(f) Further, it is the intent of the Legislature in enacting this bill for data collection purposes to allow for the designated state agencies to collect wage data to more efficiently identify wage patterns and allow for targeted enforcement of equal pay or discrimination laws, when appropriate. Therefore, it is the intent of the Legislature that this pay data will be kept confidential and not available for disclosure, except as necessary for administrative enforcement or through the normal rules of discovery in a civil action.

SEC. 2.

 Chapter 10 (commencing with Section 12999) is added to Part 2.8 of Division 3 of Title 2 of the Government Code, to read:
CHAPTER  10. Annual Pay Data Report

12999.
 (a) On or before March 31, 2021, and on or before March 31 each year thereafter, a private employer that has 100 or more employees and who is required to file an annual Employer Information Report (EEO-1) pursuant to federal law shall submit a pay data report to the department covering the prior calendar year, which, for purposes of this section, shall be referred to as the “Reporting Year.” The department shall make the reports available to the Division of Labor Standards Enforcement upon request.
(b) The pay data report shall include the following information:
(1) The number of employees by race, ethnicity, and sex in each of the following job categories:
(A) Executive or senior level officials and managers.
(B) First or mid-level officials and managers.
(C) Professionals.
(D) Technicians.
(E) Sales workers.
(F) Administrative support workers.
(G) Craft workers.
(H) Operatives.
(I) Laborers and helpers.
(J) Service workers.
(2) The number of employees by race, ethnicity, and sex, whose annual earnings fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey.
(3) For purposes of establishing the numbers required to be reported under paragraph (1), an employer shall create a “snapshot” that counts all of the individuals in each job category by race, ethnicity, and sex, employed during a single pay period of the employer’s choice between October 1 and December 31 of the “Reporting Year.”
(4) For purposes of establishing the numbers to be reported under paragraph (2), the employer shall calculate the total earnings, as shown on the Internal Revenue Service Form W-2, for each employee in the “snapshot,” for the entire “Reporting Year,” regardless of whether or not an employee worked for the full calendar year. The employer shall tabulate and report the number of employees whose W-2 earnings during the “Reporting Year” fell within each pay band.
(c) The employer shall include in the report the total number of hours worked by each employee counted in each pay band during the “Reporting Year.”
(d) For employers with multiple establishments, the employer shall submit a report for each establishment and a consolidated report that includes all employees.
(e) The report shall include a section for employers to provide clarifying remarks regarding any of the information provided. An employer is not required to provide clarifying remarks.
(f) If an employer submits to the department a copy of the employer’s Employer Information Report, otherwise known as an EEO-1 Report, containing the same or substantially similar pay data information required under this section, then the employer is in compliance with this section.
(g) If the department does not receive the required report from an employer, the department may seek an order requiring the employer to comply with these requirements and shall be entitled to recover the costs associated with seeking the order for compliance.
(h) It shall be unlawful for any officer or employee of the department or the Division of Labor Standards Enforcement to make public in any manner whatever any individually identifiable information obtained pursuant to their authority under this section prior to the institution of an investigation or enforcement proceeding by the Division of Labor Standards Enforcement or the department under Section 1197.5 of the Labor Code or Section 12940 involving that information, and only to the extent necessary for purposes of the enforcement proceeding. For the purposes of this subdivision, section, “individually identifiable information” includes means data submitted pursuant to this section that is associated with a specific person or business.
(i) Any individually identifiable information disclosed submitted to the department pursuant to this section shall be considered confidential information and not subject to disclosure pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1).
(j) Notwithstanding subdivision (h), the department may develop develop, publish on an annual basis, and publicize aggregate reports based on the data obtained pursuant to their authority under this section, provided that the aggregate reports are reasonably calculated to prevent the association of any data with any individual business or person.
(k) The department shall maintain pay data reports for not less than 10 years.
(l) For purposes of this section, both of the following definitions shall apply:
(1) “Employee” means an individual on an employer’s payroll, including a part-time individual, whom the employer is required to include in an EEO-1 Report and for whom the employer is required to withhold federal social security taxes from that individual’s wages.
(2) “Establishment” means an economic unit producing goods or services.

SEC. 3.

 The Legislature finds and declares that Section 2 of this act, which adds Section 12999 to the Government Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
To maintain the privacy of individuals who are the subject of sensitive information, that employers are required to report, regarding compensation and hours worked, sorted by gender, race, ethnicity, and job category in order to measure progress and further the state’s goal of achieving equal pay for women and people of color.