Determining Race and Gender for Reporting
NEWSLETTER VOLUME 2.9
|February 29, 2024
Determining Race and Gender for Reporting
California just clarified that you can't say 'I don't know' about an employee's race or gender. You have to pick one and it has to be on the list. They're doing this for the data.
In order to be useful, you group information into categories. For example, let's take rainbows. I love rainbows. Red orange yellow green blue and purple are not all the colors, not even close. But they represent a wide range of colors. The same is true with gender and race. No matter what categories you choose, you can't include every possibility because it would make the data difficult or impossible to work with.
I completely understand that some people disagree with me about race and gender having almost infinite possibilities, especially gender. It's confusing territory for all sorts of reasons beside what's in someone's pants. Race is much broader than skin color too.
Identifying with a particular category can also be dangerous. While it's possible to include a gender category for transgender, people may not be comfortable disclosing that information. The minute they could be identified that way, they put themselves in the way of discrimination and physical harm, including death.
The same is true for race. People of mixed race are cautious to designate themselves one or another because first, none of the categories apply well, and sometimes it's dangerous to adopt a particular label.
The data reported to the government is all anonymized, but the data employees report to their employer often is not. And thus, the dilemma.
Initially, California allowed you to state "unknown." But that makes the data less useful. So, California now requires people to state a specific race and gender even though it may make all the information less accurate. It's the problem with putting people into data—they never really fit.
And now there's guidance on what to do if you don't know someone's race or gender and don't have any information to help you choose. The advice is pick something.
The alternative is to figure out who you don't have information for and ask them to choose, but they already chose "decline to state." They either don't want to say or won't answer, probably both because it may not be safe for them.
The EEOC has suggested to look at a photo and choose. I suspect that is what California means by "observer perception." But that has accuracy problems too., which is probably why they want you to note that the basis for your choice is "observer perception." This advice also tends to reinforce gender and racial stereotypes. And the reduction of racial and gender stereotypes is a big reason why the EEOC and the California Civil Rights Division exist in the first place.
Then, since the data is used to assess demographics for discrimination, it's in the employer's interest to always pick whatever category has the fewest already in it that could possibly fit. It's probably about as accurate as looking at a photo.
But no method is ever going to be perfectly accurate anyway and it's better to guess than put your employees on the spot. Or in danger.
This is a great discussion of who the law applies to and how to figure out whether you will be reporting pay and demographics to California.
It’s almost spring, and you know what that means! It’s almost time to file the California pay data reports. Last year was the first year for filing expanded pay data reports under SB1162, which requires private employers with 100 or more employees to file a report with the Civil Rights Department disclosing certain pay data according to race, ethnicity, and gender. Covered employers are also required to file a Labor Contractor Employee pay data report if they hired 100 or more labor contractors to perform labor within the client employer’s usual course of business. The reports are due May 8, 2024, just a few short months away.
On February 1, 2024, the Civil Rights Department (CRD) updated its guidance. The majority of the guidance remains the same as last year, with a few notable clarifications, detailed below.
Out with the old, in with the new. Templates, that is. The CRD has updated the User Guide and all the linked templates for Excel and .CSV files. The newest templates must be used. The CRD has cautioned that use of the prior year’s templates will be rejected by its portal. Another new feature this year is the ability to hover over a column for instructions pertaining to a certain category of reporting, rather than having to cross-reference the instructions each time.
New data fields for remote workers. This year employers must report the number of employees who worked remotely. For this purpose, “remote workers” (both payroll employees and labor contractor employees) are those staff who work entirely remotely, teleworked or were home-based and who were not expected to regularly report in person to a physical establishment to perform their work duties. Employees who work in a hybrid model (who report both in person and remotely) are not considered remote workers for pay data reporting purposes. Employers are to use the snapshot period when determining whether to classify an employee as a remote worker. If an employer is unsure of the assigned location of a remote worker, the employer’s headquarters should be reported as that worker’s assigned establishment.
All employees must be assigned a race/ethnicity and gender. Last year, filers were able to report “unknown” for race/ethnicity or gender of a labor contractor employee. This year, marking “unknown” will no longer be permitted. The CRD directs employers to follow the EEOC’s longstanding instructions for reporting race/ethnicity. The categories offered for race/ethnicity reporting are taken from the EEO-1 survey so as to be consistent with federal reporting. Employee self-identification is the preferred method for identifying race/ethnicity. However, if an employee declines to state their race/ethnicity, employers must still report the employee as one of the seven race/ethnicity categories. If that is not possible, employers should determine race/ethnicity using (in this order) employment records, other reliable records, or observer perception. When the employer chooses to use observer perception, the CRD encourages employers to use the clarifying remarks field in the reporting form to state: “The race/ethnicity of (number) of employees in this employee grouping is being reported based on observer perception.”
Similar rules apply to reporting of gender. Gender must be reported by employers as either male, female or non-binary. Employee self-identification is the preferred method for identifying gender. However, if an employee declines to state their gender, employers must still report the employee’s gender as one of the three categories permitted. Employers may refer to current employment records or other reliable information, such as an employee’s preferred pronouns.
Are you in or are you out? Inclusion in the pay data report depends on where your staff may live and/or report to work.
- If employees/labor contractors telework outside of California but are assigned to a California establishment, they are to be included in the pay data report1;
- If employees/labor contractors telework from California and are assigned to an out-of-state establishment, they should be included in the report;
- Employees/labor contractors assigned to a California establishment and who work at client sites out of state should be reported;
- Employees/labor contractors who live in California but physically work at an establishment outside of CA do not need to be included in the report.
CRD requests collaboration on the labor contractors “snapshot.” Although not required by statute, the CRD is recommending that client employers collaborate with each of their labor contractors to choose a single pay period between October 1 and December 31 of the Reporting Year that will serve as their “Snapshot Period.” The CRD encourages use of the same Snapshot Period across all of an employer’s labor contractors, presumably for ease of CRD review.
Labor contractor’s requirement to supply data. The CRD has stated that when a labor contractor “reasonably should know” that a client employer is obligated to file a Labor Contractor Employee Report,” the labor contractor “shall” supply necessary data to the client employer, whether or not the client employer requests the data. Although not found in the statute, the CRD has imposed this affirmative sharing requirement. However, when a labor contractor “reasonably does not know” whether a client employer is obligated to file such a report, the labor contractor need only supply the data upon request. The CRD encourages labor contractors to reach out to their client employers to inquire if they have such an obligation. California employers should begin preparing now for these significant new legal requirements.
Footnotes
1 This includes all employees who work remotely and are not assigned to other locations, and thus are assigned by default to the company’s California HQ. In addition, if the remote workers are working from California but assigned to a HQ outside of California, they are included in the report.
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