California signed its pay data reporting law (SB 1162) into law Sept. 27, 2022. It went into effect Jan. 1, 2023 and is codified as California Government Code Section 12999 (pay reporting) and Cal. Labor Code Section 432.3 (pay transparency). While many laws in the United States focus on pay transparency, California’s law went beyond requiring employers to provide salary range information on job postings.
The law mandates that employers with employees or workers hired through labor contractors in the state are required to provide detailed pay data reporting on their workforce.
The law amends the existing California pay data reporting requirements, initially enacted through SB 973. That law, signed in 2020, required private employers with at least 100 employees to submit a pay data report categorized by gender, race/ethnicity, and by job category, such as sales workers.
SB 1162 goes much further and has broader reporting implications for employers.
What are California’s pay data reporting requirements?
Who needs to report?
A private employer that has 100 or more employees (at least one of whom is a California employee) must submit an annual pay data report to the California Civil Rights Department (CRD). In addition, a private employer that has 100 or more employees hired through labor contractors (at least one of whom is a California employee) must also submit a separate pay data report on the contractors they use to supply employees (the Labor Contractor Report).
Consistent with the EEOC’s EEO-1 Component 1 Report filing requirements, an employer with fewer than 100 employees is required to file if owned or affiliated with another company, or there is centralized ownership, control or management (such as central control of personnel policies and labor relations) of more than one company so that the group legally constitutes a single enterprise, and the entire enterprise employs a total of 100 or more employees.
Employers with 15 or more employees – with at least one of those employees located in California – must disclose pay ranges in all job listings.
What to report?
Pay data reports must include both the mean and median hourly wages broken down by race, ethnicity, and gender for each job category. Employers are not allowed to submit an EEO-1 report instead of a pay data report.
For reporting purposes, the law states that the number of employees included in reporting is determined by a snapshot period, which is a “single pay period of the employer’s choice between Oct. 1 and Dec. 31 of the reporting year.”
Employers are required to report the following data:
- Mean and median hourly pay rates for employees by gender and race/ethnicity in specific job categories.
- Number of employees by gender, race/ethnicity, whose earnings fall within each of the pay bands used by the U.S. Bureau of Labor Statistics in its Occupational Employment Statistics survey.
- Total number of hours worked by each employee in each pay band during the reporting year.
California updated its reporting requirements for 2024 to include three additional data points:
- The number of employees in the group that work onsite.
- The number of employees in the group that work remotely from California.
- The number of employees in the group that work remotely outside of California.
A “remote worker” is defined as an employee who is entirely remote, teleworking, or home-based, and has no expectation to regularly report in person to a physical establishment to perform work duties. Employees in hybrid roles or partial teleworking arrangements expected to appear in person to perform work during any portion of the snapshot period would not be considered a remote worker for purposes for pay data reporting in California.
Beginning with Reporting Year 2025, California added three further data fields that employers must include:
- Exemption status: Whether each California employee is exempt from the minimum wage and overtime provisions of the California Industrial Welfare Commission wage orders and/or the federal Fair Labor Standards Act.
- Employment type: Classification of each California employee as “Full-time,” “Part-time,” or “Intermittent.”
- Total annual weeks worked: The number of weeks each California employee worked during the reporting year, including weeks during which the employee was on any form of paid time off.
California also updated its race and ethnicity classifications, which affect how employee data is categorized and reported:
- Addition of a new category: Middle Eastern or North African (MENA)
- Removal of “Other” from the Native Hawaiian or Other Pacific Islander category
- Adoption of “Multiracial and/or Multiethnic” in place of “Two or More Races”
In addition, under amendments to Government Code Section 12999 made by SB 464, effective Jan. 1, 2026, employers and labor contractors are also required to collect and store any demographic data gathered for these reporting requirements separately from employees’ personnel records, strengthening data protection practices, the appropriate use of sensitive information, and compliance during audits and investigations.
Employers must track job titles and wage rates for each position. They must maintain records for the duration of an employee’s tenure, plus three years following termination. An employee who spent three years with the employer, for example, would need to have records maintained for no less than six years.
Employers need to submit the mean and median hourly pay rate for employees by gender and race/ethnicity in each of the following job categories:
- Executive or senior level officials and managers
- First or mid-level officials and managers
- Professionals
- Technicians
- Sales workers
- Administrative support workers
- Craft workers
- Operatives
- Laborers and helpers
- Service workers
Consistent with the EEOC’s EEO-1 Report filing requirements, an employer with fewer than 100 employees is required to file if owned or affiliated with another company, or there is centralized ownership, control or management (such as central control of personnel policies and labor relations) of more than one company so that the group legally constitutes a single enterprise, and the entire enterprise employs a total of 100 or more employees.
Importantly, Section 12999 requires that an employer that has 100 or more labor contractors (such as through a staffing agency) must also submit a separate pay data report for those labor contractors (the Labor Contractor Report). Employers must disclose the name of every staffing agency they use to supply these contractors and “labor contractors shall supply all necessary pay data to the private employer.”
The amendments made by SB 1162 eliminated consolidated reports for employers with multiple establishments and as such, requires employers to file a separate pay data report for each location.
Looking ahead: Major changes coming in 2027
Employers should prepare now for significant changes taking effect with Reporting Year 2027, under amendments to Government Code Section 12999 made by SB 464, effective Jan. 1, 2027. These changes move California’s framework closer to the standards of the EU Pay Transparency Directive.
- Expanded job categories: California will replace the current 10 EEO-1 job categories with 23 Standard Occupational Classification (SOC) categories used by the U.S. Bureau of Labor Statistics, introducing greater granularity to better identify employees performing equal or comparable work.
In parallel, the California Civil Rights Council has established a pay data reporting subcommittee tasked with clarifying key definitions, what must be reported, and longstanding compliance ambiguities — signaling that further guidance may still emerge.
Where and when to report?
Employers submit their pay data reports through the California Civil Rights Department’s (CRD) online portal yearly.
Deadline: Pay range disclosures must be appended to job listings and pay records for established employees. The portal for pay data reporting opens Feb. 1 and the annual deadline to submit payroll and labor contractor employee reports is the second Wednesday of May.
Cadence: Yearly
What are California’s employment equity standards?
California also amended the California Equal Pay Act in 2015. Now codified as California Labor Code Section 1197.5, California recognizes a standard of equal pay for substantially similar work. The California Equal Pay Act, as amended, prohibits employers from paying employees less than “employees of the opposite sex, or of another race, or of another ethnicity for substantially similar work” according to the Department of Industrial Relations.
Substantially similar work is defined as work that is mostly similar across four factors: skill, effort, responsibility, and working conditions. This is a different standard than the “equal work” standard set out in the Federal Equal Pay Act.
Under recent amendments made by SB 642, the definition of pay applicable to this right to equal pay was expanded: The definitions of “wages” and “wage rates” now explicitly include every form of compensation, direct or indirect, cash or in kind — including bonuses, stock and stock options, profit-sharing, insurance, vacation and holiday pay, allowances, reimbursements, and benefits.
What are California’s pay transparency requirements?
California’s pay transparency law requires employers to provide salary ranges on job postings under Section 432.3 of the Cal. Labor Code, as amended by SB 1162 and SB 642.
Employers with 15 or more employees — with at least one of those employees located in California — must disclose pay ranges in all job listings if the position may ever be filled in California, either in-person or remotely.
Pay range is defined as the salary or hourly wage range that an employer “reasonably expects to pay” for a given job position. Under amendments made in 2025, this must be an estimate made in “good faith.”
Under Labor Commissioner guidance, the 15-employee threshold is met when:
- An employer employs 15 employees at any point within a given pay period.
- And at least one of those employees is located in California.
For employers with multiple facilities, all employees are counted across all facilities even if some of those employees and those working at those facilities are located outside of California.
This additional, affirmative salary range posting in job-listing requirements adds to the existing requirement that employers with at least one employee must disclose the pay range to an applicant if that applicant completes the first interview and requests the pay range for the relevant job.
Employers working with staffing agencies will also need to share pay ranges if they list jobs with those vendors.
What are the risks of non-compliance?
Significant penalties apply for employers that fail to comply with Gov. Code Section 12999, and recent amendments have made those penalties materially harder to avoid.
Amendments to Section 12999, effective on Jan. 1, 2026, remove judicial discretion in penalty enforcement. Previously, courts had latitude in whether to impose penalties on non-filers. Now, if the CRD requests civil penalties for an employer’s failure to file the required report, a court must impose them. The penalty structure is:
- $100 per employee for a first violation
- $200 per employee for each subsequent violation
Because the penalty is assessed per employee, exposure scales directly with workforce size — and the removal of judicial discretion eliminates a previously available avenue for relief. A first violation at an employer with 1,000 California employees now carries a mandatory $100,000 penalty.
Separately, under Sec. 432.3 of the Cal. Labor code, the non-compliance penalty is up to $10,000 for failing to post a pay range in a job listing, per violation. Additional legal action can arise from employees pursuing their own claims.
These provisions signify California’s laws as potentially the most aggressive pay reporting and transparency law in the U.S., by which non-compliant employers could easily face an aggregate seven-figure penalty.
How can Trusaic assist employers with California pay data reporting compliance?
At Trusaic, we provide employers with California pay data reporting requirements with solutions to comply confidently.
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.