In October, California enacted two bills that will expand its pay data reporting requirements and strengthen its existing pay transparency and pay equity laws.
Senate Bill 642, signed into law Oct. 8, 2025, takes effect Jan. 1, 2026 and brings pay transparency and pay equity changes.
Senate Bill 464, signed into law Oct. 13, 2025, takes effect Jan. 1, 2027 and expands pay reporting requirements. These changes bring California’s framework significantly closer to the standards established under the EU Pay Transparency Directive (EUPTD) — especially around full-scope compensation reporting and detailed occupational categorization.
California’s New Definition of Pay
One of the most consequential aspects of California’s update is its expanded definition of “wages” and “wage rates.” These terms now explicitly include every form of compensation, direct or indirect, cash or in kind.
The law now covers:
- Salary
- Overtime pay
- Bonuses
- Stock and stock options
- Profit-sharing and bonus plans
- Life insurance
- Vacation and holiday pay
- Allowances (cleaning, gas, travel, lodging, etc.)
- Reimbursements
- Benefits
This mirrors the EUPTD requirement that employers evaluate and report all components of pay, not just base salary. For employers, this change eliminates ambiguity and reinforces that total compensation must be captured in all analyses and reporting.
A New Subcommittee to Provide Clarification
The California Civil Rights Council established a new subcommittee on pay data reporting to finalize long-awaited regulatory updates.
The subcommittee is expected to clarify:
- Key definitions within the pay data reporting framework
- What must be reported (not just how)
- Ambiguities that have made compliance challenging
Senate Bill 464: Major Expansion of California’s Pay Data Reporting Requirements
SB 464 significantly amends Section 12999 of the Government Code and expands employer obligations in three major areas:
1. Expanded Job Categories
California is replacing the old 10 EEO-1 job categories with 23 Standard Occupational Classification (SOC) categories used by the U.S. Bureau of Labor Statistics.
This shift provides more detail about job roles and aligns with the EUPTD’s emphasis on identifying workers performing equal or equal-value work.
2. New Rules for Handling Demographic Data
Employers and labor contractors must now store demographic data separately from personnel files.
This requirement reinforces:
- Data protection
- Appropriate use of demographic information
- Compliance during audits or investigations
3. Mandatory Civil Penalties for Non-Filers
California has eliminated judicial discretion in assessing penalties. If the California Civil Rights Department requests penalties, they are mandatory:
- $100 per employee for the first violation
- $200 per employee for subsequent violations
Effective Date
All SB 464 requirements take effect Jan. 1, 2027, giving employers a year to adjust their systems and processes.
How California’s Changes Align With the EU Pay Transparency Directive
California’s latest updates bring its pay transparency laws closer than ever to the EUPTD’s structure and intent. Employers should note the following parallels:
- Both frameworks require reporting of all elements of compensation, including variable and in-kind pay.
- Both frameworks emphasize precise, granular job categorization to evaluate equal-value work.
- Both incorporate strict privacy requirements around demographic data.
- Both frameworks promote standardization of reporting formats and definitions.
- Both include meaningful enforcement mechanisms for noncompliance.
For multinational organizations, this alignment simplifies long-term compliance planning by allowing a more unified global pay equity strategy.
What Employers Should Do Now
California employers should begin early preparation for these expanded requirements:
- Audit compensation systems to ensure all pay elements can be reported
- Review job architecture and titles in anticipation of the additional SOC categories
- Assess HRIS and HR compliance workflows for demographic data separation
- Evaluate global alignment if operating in EUPTD jurisdictions
- Strengthen analytics tools — spreadsheets will no longer be sufficient
These changes mark a shift toward more thorough, more transparent, and more enforceable pay reporting.
How Trusaic Can Help
At Trusaic, we provide employers across California, the U.S., and the EU with solutions to comply confidently with expanding pay transparency requirements.
Our Pay Equity Software Suite enables compliant pay systems, ensures gender-neutral job evaluations, and automates complex reporting obligations to keep your organization one step ahead of enforcement.
- PayParity® analyzes base pay and all complementary or variable components using legally defensible regression-based analysis.
- Remediation Optimization Spend Agent (R.O.S.A.) identifies the most cost-effective strategies to close nominal pay gaps and meet remediation expectations.
- Regulatory Pay Transparency Reporting™ automates complex state and global reporting requirements, including California’s expanded regime and the EUPTD.
- Salary Range Finder® helps employers build equitable, transparent salary ranges aligned with local laws.
- Pay Decisions: Generate fair, competitive offers instantly from Workday.
Trusaic supports compliance with CCPA/CPRA, GDPR, and emerging pay transparency regulations worldwide. Our end-to-end solutions enable organizations to meet the evolving requirements of and build a sustainable, defensible pay equity framework.