Diversity and Pay Reporting in California

When California signed Senate Bill 973 on September 30, 2020, it created a significant change for companies within the state – including the entertainment industry. The new legislation now requires all private companies with 100 or more employees to report annual employee pay data broken down by race, ethnicity, and sex to the Department of Fair Employment and House (DFEH).

The intent of this change is to identify pay wage gaps in workplaces so as to better enforce equal pay and discrimination laws. Considering the entertainment industry is one of the largest employment sectors in California, it’s important that studios, production companies, and other entities understand the new requirements – which come with a learning curve.

To help with the upcoming March 31st deadline, we have prepared some FAQs to help better understand SB 973 and how it applies to the entertainment industry. Here is also a snapshot guide to some of the key components of the legislation to be aware of.

Employee Demographics and Pay Bands

Companies will have to report the number of employees by race, ethnicity and sex via 10 pre-determined job categories:

• Executive or senior level officials and managers
• First or mid-level officials and managers
• Professionals
• Technicians
• Sales workers
• Administrative support workers
• Craft workers
• Operatives
• Laborers and helpers
• Service workers

In addition, companies will have to report the number of employees by race, ethnicity, and sex across certain pay bands used by the U.S. Bureau of Labor Statistics. Because the job categories are broad, and the entertainment industry is home to occupations not necessarily designed for this style of organization, it’s important for companies to determine early on – as best as possible – what roles should be assigned to which job categories. For example: In which category does a production designer go? A special effects designer? A script supervisor? Invest time and thought into making those executive decisions to make reporting easier now and in the future.

Companies should also be prepared for how the new legislation differs from its federal counterpart, known as the EEO-1 Report, which several entertainment employers are also obligated to file. While SB 973 resembles the EEO-1 Report in some respects, SB 973 is broader and the reporting differs in material ways. That means companies need to be prepared to pull together a lot more data (particularly pay data) than they have in the past.

Structuring, Organizing, and Understanding the Data

Because of the unique way companies within the entertainment industry can be structured, entities – especially studios – need to determine how they will organize their information for reporting purposes. For example, the studio environment contains many different entities and divisions. Studios and production companies will need to determine if each unit should file separately? Does the studio or production company submit as one company and include the data for all its other units? How a studio or production company reports the data also may have labor law implications in other areas. Companies also need to be sure to understand how they will proceed in order to avoid any gaps that could risk violations and penalties.

Furthermore, while companies may already have reporting infrastructure in place to provide the previously required demographic information, that may not be the case for the new pay and hours data. It may be accessible but may exist in different systems and not organized in a way that will make it easy to report. All companies that fall under the purview of this new legislation should prepare for some front-end work this year. To help support the industry, Entertainment Partners has created a Diversity Management solution to give studios and production companies the tools to comply with SB 973.

EP’s solution is the only product designed specifically for the entertainment industry that can provide studios and production companies with the broad range of demographic and pay information necessary to comply with SB 973. To learn more about the EP Diversity Management solution, or for questions related to the new reporting required by SB 973, click the contact us button to submit a request.