Changes Are in Store for California Pay Data Reporting, Pay Transparency, and Pay Equity Requirements

Several legislative and regulatory developments in California are poised to make notable changes to the state’s pay data reporting, pay transparency, and pay equity laws. These measures include a new subcommittee on pay data reporting to review upcoming regulations, a new law to expand pay data reporting obligations, and a new law to clarify terms and enhance pay transparency and pay equity protections. 

Subcommittee on Pay Data Reporting

On October 6, 2025, the California Civil Rights Council voted to establish a subcommittee on pay data reporting. This newly formed subcommittee is expected to begin reviewing a nearly finalized package of proposed regulations within the next 30 days. 

These regulations are expected to be substantive, not merely procedural, reflecting the employer community’s call for greater clarification on many key unresolved questions regarding California’s pay data reporting requirements. Specifically, the subcommittee will focus on:

• Defining key terms and concepts within the pay data reporting framework
• Clarifying what must be reported, not just how to report it
• Addressing ambiguities that have created challenges for employers 

This initiative marks a significant step toward refining the regulatory landscape and ensuring that employers have the guidance needed to meet their obligations under California’s evolving pay equity laws.

Expansion of Pay Data Reporting Requirements: Senate Bill 464

The formation of a subcommittee on pay data reporting may also influence how newly enacted Senate Bill 464 is implemented. Introduced by Senator Smallwood-Cuevas, SB 464 substantially amends Section 12999 of the Government Code (annual pay data report). Employers now face broader obligations around demographic and compensation data reporting.

Here are some of the key changes resulting from this new law:

Expanded Job Categories

The law increases the number of job categories from 10 to 23, shifting away from the EEO-1 type of categories and aligning job categories with the Standard Occupational Classification (SOC) system used by the U.S. Bureau of Labor Statistics. The SOC is a framework used by U.S. government agencies to classify workers into occupational categories for the purpose of collecting, analyzing, and disseminating data.

The new list of job categories in SB 464 provides more detail on occupations and adds entirely new occupational groups such as: 

• Health Care Support Occupations
• Community and Social Service Occupations
• Educational Instruction and Library Occupations
• Farming, Fishing, and Forestry Occupations
• Art, Design, Entertainment, Sports, and Media Occupations
• Protective Service Occupations

Demographic Data Handling

The amended law requires employers and labor contractors to store demographic data separately from personnel records. This includes data on race, ethnicity, and sex, and may include other voluntarily disclosed characteristics. 

What does this mean for the employer community? Employers should consider auditing their recordkeeping practices. Maintaining separate storage not only helps safeguard sensitive information but also makes it easier to demonstrate that data is not being used inappropriately. This separation reinforces compliance and can be critical during audits or investigations, helping to show that no unintended misuse of demographic data has occurred.

Mandatory Civil Penalties – High Risk for Noncompliance

The new law eliminates courts’ discretion to impose penalties for violations of pay data reporting. The penalty amounts of $100 per employee for first failure and $200 per employee for subsequent failures remain the same, but the penalties will be mandatory if requested by the Civil Rights Department. Removal of judicial discretion makes enforcement stricter in that it effectively results in an automatic penalty assessment. Employers that fail to file the report – even once – will face these mandatory financial penalties, making compliance crucial.

These requirements will go into effect on January 1, 2027, giving employers a year to prepare for the changed reporting requirements. 

Enacted Senate Bill 642

In parallel with the regulatory momentum surrounding SB 464, Governor Newsom signed Senate Bill 642 into law on October 8, 2025, further strengthening California’s wage transparency and pay equity laws. SB 642 amends Labor Code Sections 432.3 and 1197.5, introducing several key changes, which take effect on January 1, 2026.

Pay Scale Disclosure Requirements

Statutory amendments to this law clarify that employers must provide a good-faith estimate of the expected wage range for a position upon hire. This amendment makes clear that the pay scale provided is that which the candidate can expect immediately upon hire, as opposed to some point in the future. 

Expanded Pay Equity Protections

The law replaces “opposite sex” with “another sex,” broadening protections to be more inclusive.

In addition, employees may now recover wages for violations lasting up to six years, with a three-year statute of limitations from the last date the violation occurred. A cause of action is triggered not only when a discriminatory pay decision is made, but also each time wages are paid under that decision.

Definitions of “wages” and “wage rates” now explicitly include all forms of compensation, such as salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits. Note that this newly revised definition of wages applies in the context of this statute only and is not to be construed to apply to any other provisions of the Labor Code. 

Employers should review their pay policies and recordkeeping systems to ensure compliance with both SB 642 and SB 464.