California Governor Gavin Newsom signed a bill, SB-973 Employers: Annual Report: Pay Data, on September 30, 2020 that will require all private employers with 100 employees or more to report on pay data and hours worked annually, with the first report due March 31, 2021.  This report is meant to take the place of the rescinded “EEO-1 Component 2” report the Trump Administration has halted.  The report includes first reporting the number of employees by race/ethnicity and gender in each of the federally identified EEO categories.  Second, it asks for the number of employees by race/ethnicity and gender whose annual W-2 earnings fall within certain pay bands.  Third, it asks for total number of hours worked by each employee during the reporting year.  California intends to use the data to “more efficiently identify wage patterns and allow for targeted enforcement of equal pay or discrimination laws.” The report will be filed with the California Department of Fair Employment and Housing, who will also be sharing the data with various other California agencies.  There are several unanswered questions about this law.  For example, it is unknown if companies must comply if there are 100 employees in the company, but if only one or two physically work in California.  Additionally, do companies with employees in other states report on all employees, or only those in California?   We are very concerned about this report because meaningful analysis on pay discrimination cannot be conducted with the data from this report.  Any such analysis would be based on broad aggregation of jobs that are not similarly situated, and thus will be meaningless.  We are also concerned with the data security and it is not known if a system is ready to accept the reports.  However, clients can count on us to prepare and file this report for you if you would like our help.