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SB 973, California Pay Data Reporting Law FAQs

A look at the new pay data reporting law and its impact on the entertainment industry
March 6, 2021

Joseph Scudiero

California-sb973
Updated February 16, 2022

For the second year, California will be collecting annual pay data reporting from private employers who are also required to file federal EEO-1 reports, in compliance with the 2020 passage of SB 973. Reporting is due April 1, 2022.

What is SB 973?

SB 973 is a significant new employment law in the state of California that requires certain employers to report employee demographic and pay information to the state starting this March. It broadens the current federal requirement significantly by adding a new pay data component. 

Who is required to file?

Private employers of 100 or more employees that also are required to file annual Employer Information Reports (EEO-1) pursuant to federal law must submit annual pay data reports to the California Department of Fair Employment and Housing (DFEH) that contain specified wage information.

In the entertainment industry, production companies are required to report because they operate as the common law (EEO-1) employer. 

What is the deadline for filing?

Employers must file a pay data report on or before April 1, 2022, and on or before April 1 each year thereafter.

How will this impact the entertainment industry?

SB 973 is expected to have a major impact on the entertainment industry.  As the responsible covered employer, production companies will need to track talent and crew by race, gender, and ethnicity, as well as track annual wage (W-2 earnings) pay, across the 10 job categories specified below. 

What are the reporting requirements?

SB 973 requires covered employers to submit a pay data report each year to the DFEH that covers the prior calendar year, or the “Reporting Year.”  The report must identify the number of employees by race, ethnicity, and sex across 10 different job categories (similar to the EEO-1 categories), which include (1) executive or senior level officials and managers; (2) first or mid-level officials and managers; (3) professionals; (4) technicians; (5) sales workers; (6) administrative support workers; (7) craft workers; (8) operatives; (9) laborers and helpers; and (10) service workers. 

The report also must identify the number of employees by race, ethnicity, and sex, whose annual earnings fall within each of the twelve (12) earnings pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey.

What are the penalties for failure to comply?

If the DFEH does not receive the required report from an employer, the DFEH may seek an order in court requiring the employer to comply with filing requirement. The DFEH is entitled to recover its costs associated with seeking the order for compliance and the court proceeding would be a matter of public record.

What if I have multiple places of business?

A multi-establishment employer must report on each of its establishments by either filing a single report for each establishment or a consolidated report that includes each establishment. An “establishment” is defined as an economic unit producing goods or services.  The report must be submitted in a searchable format.  An employer may satisfy its obligation under this law by submitting its federal EEO-1 Report, if the EEO-1 Report contains substantially similar pay data information as that required by SB 973 which is not the case at the current time.

What should you do if you think you might be required to file?

You first should confirm if your company is covered by reviewing your workforce in California and nationally. If covered, you will need to determine if you can gather and report the necessary demographic and pay data across the EEO job codes and pay bands within the template required by the DFEH. Entertainment Partners has produced a variety of information about compliance with SB 973 to help you understand the obligations. In addition, our new solution - Diversity Management – is the only product specifically designed 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. Please contact us for more information.

Topic: Legal

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