California Employers May Request A Deferral To File Labor Contractor Employee Report
On May 10, 2023, private employers with 100 or more employees, with at least one employee based in California, must file their annual pay data reports with the California Civil Rights Department (“CRD”).
Annual pay data reports consist of (1) a Payroll Employee Report, and/or (2) a Labor Contractor Employee Report.
- A Payroll Employee Report covers pay and demographic data for employees on an employer’s payroll in the prior calendar year.
- A Labor Contractor Employee Report separately covers pay and demographic data for labor contractor employees hired through labor contractors in the prior calendar year (for example, temporary employees).
- The Labor Contractor Employee Report is new for 2023.
- A labor contractor is an “individual or entity that supplies . . . a client employer with workers to perform labor within the client employer’s usual course of business.”
- A labor contractor employee is an “individual on a labor contractor’s payroll, including a part-time individual, and for whom the labor contractor is required to withhold federal social security taxes from that individual’s wages, and who performs labor for a client employer within the client employer’s usual course of business.”
- A Labor Contractor Report is required only if a private employer has 100 or more labor contractor employees working for it.
- To gather data for the Labor Contractor Report, employers must request the data from their labor contractors, which in turn are obligated by law to provide specified data to their customers.
Since April 18, 2023, CRD has been accepting “enforcement deferral requests” to allow employers more time to file the Labor Contractor Employee Reports. In order to make such a request, an employer must first register itself in the CRD’s pay data reporting portal and then submit the request through the portal. If the request is granted, it is not considered an extension. The CRD will simply defer – through July 10, 2023 – seeking an order of compliance for the employer to file its Labor Contractor Employee Report.
It is crucial that employers know that the deferral request is for the Labor Contractor Employee Report only. The Payroll Employee Report, for an employer’s own employees, is still due on May 10, 2023, and no deferral requests are available.
A failure to comply with the annual pay data filing requirements by the deadline can result in civil penalties, and CRD may seek a court order requiring employers to comply with the pay reporting requirements.
Impact on Employers
Private employers who are required to file a Labor Contractor Employee Report and need additional time to complete the report may request an enforcement deferral, which would allow filing by July 10, 2023. Private employers who are required to file a Payroll Employee Report must do so by May 10, 2023 to avoid possible civil penalties.
If you have questions regarding compliance with the annual pay data reporting obligations discussed above, contact your regular employment counsel or employment counsel at AALRR for assistance.
This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.
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