California Revamps Pay Data Reporting Obligations

With pay data reports for 2025 due May 13, 2026, California-based private employers’ attention is starting to turn to compliance with the annual reporting obligation. Senate Bill 464 (2025) changed the pay data reporting obligations, introducing new requirements effective this year concerning liability and information storage, and in new job categories for 2027. In complying with reporting obligations this year, and preparing for reporting next year, employers should consider the following changes imposed by the bill. 

Background

Since 2021, California has required covered employers (employing 100 or more employees, including workers employed through labor contractors) to submit annual pay data reports to the California Civil Rights Department (“CRD”). The pay data report includes employee counts by race, ethnicity, and sex across  ten specific job categories, employee earnings by pay bands, and both the mean and median hourly pay rates by race, ethnicity, and sex. Pay data pertaining to labor contractor employees must also be reported on a labor contractor employee report (with information supplied by the labor contractors) if the work performed by the labor contractor employees is within the usual course of business of the employer. A failure to submit such annual pay data reports to the CRD resulted in potential discretionary penalties of $100 per employee and $200 per employee for repeat violations.

Mandatory Imposition of Civil Penalties

Prior law stated that a court “may impose” a civil penalty of $100 per employee for the first infraction and $200 per employee for the second and subsequent infractions related to failures to file such reports. However, SB 464 makes the imposition of penalties in 2026 and beyond mandatory, stating a court “shall impose” a civil penalty for failure to comply.

Demographic Information Storage

Employers must also now ensure that any information for pay reporting purposes is collected and stored separately from employees’ other personnel records. While some employers previously separated such pay reporting data from their employee personnel records, this is now required by law.

Changes to Job Category Classifications

Finally, starting on January 1, 2027, employers’ reporting obligations will no longer be based on EEO-1 categories. Instead, all employees will need to be classified into one of 23 job categories based on the Standard Occupational Classification (“SOC”) system. The following chart compares the EEO-1 versus SOC categories:

With very little crossover between the EEO-1 and SOC categories, employers will be faced with the time-consuming task of re-categorization of positions once the reporting period in 2026 concludes.

Conclusion

Employers should consider taking the following steps regarding pay reporting obligations due to SB 464:

• Coordinate internally and with labor contractors to ensure data is complete for the upcoming May 13, 2026 reporting deadline;
• Keep the pay reporting data separate from employee personnel files if not already doing so; and
• Begin assigning job titles to one of the twenty-three new SOC job categories in an accurate and strategic manner for the 2027 reporting period.

2026 reports using the new SOC categories will be due May 12, 2027, so employers will have time to readjust the categorization of employee job categories from the 10 EEO-1 categories to the 23 SOC categories.

Employers with questions regarding the pay data reporting obligations may contact the authors or their usual employment law counsel at AALRR.

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.

© 2026 Atkinson, Andelson, Loya, Ruud & Romo