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April 2023: Enforcement Deferral Available for California Pay Data Reports on Labor Contractor Employees

27 Apr

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Update Applicable to:
All employers with 100 or more labor contractor employees in California.

What happened?
On April 14, 2023, the California Civil Rights Department posted a new FAQ providing more information for “labor contractor employees” under the expanded pay data reporting requirements from Senate Bill 1162 (SB 1162)’s passing.

What are the details?
In 2022, the California legislature passed SB 1162, which expanded the state’s existing pay data reporting requirements for “payroll employees” to include a new pay data report for employers with 100 or more “labor contractor employees.” Under SB 1162, the pay data reporting deadline was moved to May. This year these reports are due May 10th.

But—according to a new FAQ from the California Civil Rights Department—beginning April 18, employers may seek “enforcement deferral” on their “labor contractor employee reports.”

The key takeaways from the April 14 FAQ update include the following:

  • The CRD will only accept requests for enforcement deferral through its pay data reporting portal. As such, employers interested in taking advantage of this reprieve must first register for the portal.
  • Request for enforcement deferral must be made by May 10, 2023.
  • The enforcement deferral will be through July 10, 2023.
  • The CRD will not consider requests made by a third party on behalf of an employer, such as a Professional Employer Organization (PEO).
  • The enforcement deferral request will only apply to “labor contractor employees” reports. Reports covering “payroll employees” will still be due on May 10.

Under applicable pay data reporting requirements, the CRD may seek a court order requiring the employer to comply with reporting requirements if they do not submit in time, as well as civil penalties of up to $100 per employee for initial violations. Employers with concerns over the May 10 “labor contractor employee” reporting deadline may benefit from taking advantage of this procedure to seek enforcement deferral.

For more information, please see the links below:

Senate Bill 1162 (SB 1162)

FAQ

Pay Data Reporting Portal

Article

What do employers need to do?
Employers should review the links above and refer to the FAQ provided above for more information and guidance regarding pay data reporting in California.

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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