California employers, take note. You have just three months to report last year’s payroll data to the state. Complying with this strict law requires an action plan. The good news is that the state has published detailed FAQs to help guide employers through the process. The better news? FP Attorneys reviewed all 20,000 words of detail and devised a simple three-step plan to stay compliant.
Main developments
what’s new?
You may be familiar with the first payroll data law passed in 2020, which affects private employers with 100 or more employees. You may also be aware of the 2022 amendments that expand data reporting requirements and add penalties for non-filers. These changes strengthen obligations on manufacturing, warehousing, service industries, and all other industries that rely on contractor employees and, among other things, require separate payroll data reporting for contractor employees. I did.
However, there are some important updates to be aware of. CRD has made changes to report templates that require new or additional information than last year.
remote worker
Three new data fields have been added to the reporting requirements for collecting remote worker data:
- Number of employees not working remotely.
- Number of remote employees based in California.
- Number of remote employees outside of California assigned to California facilities.
For purposes of payroll data reporting, a “remote worker” is an employee who is fully remote, telecommuted, or works from home and is not expected to be regularly present in person at a physical facility to perform job duties. employees (payroll personnel or contractor employees). their job duties. Employees who work on a hybrid schedule or partial work-from-home arrangement where they are expected to regularly travel to a specific facility to perform their duties for certain hours during the snapshot period are considered remote workers for payroll data reporting purposes. is not considered a person.
Employers should use the snapshot period to determine whether an employee meets the definition of a “remote worker” for payroll data reporting purposes. For employees who were fully remote for part of the year but transitioned to hybrid or in-office work for other parts of the year, the snapshot period determines whether the employee was a “remote girlfriend worker.” Masu. If an employee is expected to report directly to a physical facility during the snapshot period, that employee should be reported as a remote worker, regardless of whether they work remotely at other times. Not.
Reporting “unknown” demographic information is no longer allowed
For the 2022 reporting year, the CRD has allowed employers to report the “unknown” race/ethnicity of labor contract employees in certain cases. This is no longer allowed. You must obtain this information from your labor contractor to include it in your report.
Penalties for violations
There are penalties for employers who do not comply with payroll data reporting requirements. Penalties for non-filers include a civil penalty of $100 per employee, but the penalty for failure to file the required report subsequently increases to $200 per employee. These penalties may also be imposed against labor contractors who fail to provide their client employers with the required payroll data in a timely manner.
3 steps to take
1. Determine whether you need to file a payroll employee report or a labor contractor employee report, even if you are based outside of California.
In addition to the salaried employee report, private employers (with at least one California-based worker) that had 100 or more workers hired through labor contractors in the previous calendar year must A separate Labor Contractor Employee Report must be filed for workers who have been hired. In the previous calendar year. A labor contractor is a person or entity that supplies labor to a client employer within the normal scope of business of the client employer, whether under contract or not.
First, you need to check whether you are required to submit a payroll data report this year for either your payroll personnel or labor contractors. Employers who did not file an employee payroll report last year because they have fewer than 100 employees should check whether their employee count has changed and they need to file a report this year. there is. Additionally, check to see if she employed more than 100 labor contractor employees (and at least one of her California employees). If you hire one, you will be required to submit a Labor Contractor Employee Report.
Employers located outside of California with 100 or more employees must submit a payroll data report if they have at least one employee in California.
2. Identify labor contractors and request required labor contractor pay data reporting information.
You must identify the labor contractor, send a written communication, and request the information necessary to complete the labor contractor’s employee report. Labor contractors must comply with these requirements and there are penalties for non-compliance, but the onus is on employers using labor contractors to submit reports. Ensure that written requests for information from labor contractors are sent as soon as possible to ensure timely collection of information by labor contractors, especially to avoid potential “unknown” responses for demographic information. please.
3. Plan to submit your payroll data report by the May 8 deadline.
Designate an individual or team of individuals to be responsible for ensuring all information is collected for payroll and labor contractor employee reporting and submit the report by the May 8 deadline. To do. You should start doing this early to ensure compliance and have questions about the new requirements answered by the deadline.
