Legal Update

Apr 18, 2023

California Employers May Request “Enforcement Deferral” for Labor Contractor Pay Data Reports

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Seyfarth Synopsis: California’s Civil Rights Department has announced that it will allow employers to request an “enforcement deferral period” (i.e., an extension), which, if granted, gives employers until July 10th to submit the new Labor Contractor Employee Report before the Agency seeks a court order requiring the employer to comply. The due date for the Payroll Employee Report remains May 10th.

As we discussed here and here, this year, for the first time, employers that have 100 or more employees hired through labor contractors, with at least one in California, have a new obligation to produce data on pay, hours worked, race/ethnicity, and gender in a separate report called the Labor Contractor Employee Report. This Report will be due annually on the second Wednesday of May. This year’s report is due on May 10th, but California’s Civil Rights Department (“CRD”) announced on April 14th through its Frequently Asked Questions that it will allow employers to request that CRD defer seeking an order for compliance for its Labor Contractor Employee Report until July 10, 2023. While CRD has since removed that FAQ from its website, the option to request a deferral appears to still be available to employers through the Portal. Although CRD is specifically calling this an “enforcement deferral period,” it essentially amounts to an extension, if granted. Notably, the ability to request this enforcement deferral does not apply to the Payroll Employee Reports which are still due on May 10, 2023.

According to the recently deleted FAQs, beginning today, April 18th, employers wishing to request an enforcement deferral period for their Labor Contractor Employee Reports must do so by registering in CRD’s portal, and filling out and submitting the request form. CRD’s original FAQs stated that the Agency will not accept or consider requests submitted through any other method, such as by email or phone, nor will it consider requests submitted by a third party on behalf of an employer. Furthermore, the approval appears to only apply to a single employer, so organizations with multiple covered legal entities must submit a separate request for each entity seeking an extension. All requests must be submitted to CRD before May 10, 2023.

Specifically, the request form requires employers to provide information on the employer requesting the enforcement deferral, the name(s) of their labor contractor(s), the number of labor contractor employees, a justification for the deferral request, and the name and contact information of the person requesting the deferral. In order to submit the request, employers must agree to the declaration which states, “I declare under penalty of perjury that the above information is true, correct, and complete and I am signing on behalf of the above employer.”  Accordingly, employers who are not yet sure who their labor contractors are, or how many labor contractor employees they will report, should consult legal counsel before submitting the request.

Once the request form is submitted, it appears that the Agency is systematically approving them but notifying employers that they should not expect that CRD will grant this enforcement deferral in future years.

We are continuing to closely monitor CRD’s FAQs and the Enforcement Deferral Request Form for any additional updates. In the meantime, employers that need additional time to gather the required data from their labor contractor partners should consider requesting an enforcement deferral through CRD’s portal.