Understanding Updates and Enforcement of California Pay Data Reporting

California continues to strengthen its pay transparency and equity laws. The California Pay Data Reporting law requires businesses to submit compensation data, ensuring fair pay practices. Recent updates have expanded reporting requirements, making compliance more complex.

Employers must now disclose more detailed pay data, including salary bands and contractor wages. Stricter enforcement measures also mean higher penalties for non-compliance. Failing to meet these new requirements can lead to fines, audits, and reputational risks.

This guide explains the latest updates, enforcement actions, and compliance strategies. Whether you employ full-time staff or contractors, understanding these changes is essential to staying compliant and avoiding penalties.

What is California Pay Data Reporting?

California Pay Data Reporting is a legal requirement designed to promote pay equity and workforce transparency. Under this law, certain employers must submit annual reports detailing employee compensation data to the California Civil Rights Department (CRD). The goal is to identify and address wage disparities across gender, race, and ethnicity.

Under the legislation, these are the employers that are required to report under the California Pay Data Reporting laws:

• Private employers with 100 or more employees must submit a Pay Data Report annually.
• Companies with 100+ workers hired through labor contractors must file a separate Labor Contractor Employee Report (SB 1162 requirement).
• Employers must report data regardless of whether they file federal EEO-1 reports.

This requirement originates from Government Code Section 12999, which was updated through Senate Bill 1162 (SB 1162). Employers are required to provide specific compensation and workforce data. These include:

• Employee Compensation Data: Pay is categorized by gender, race, and ethnicity.
• Pay Bands:  Salary ranges following the U.S. Bureau of Labor Statistics classification.
• Mean and Median Hourly Rates: New reporting requirements under SB 1162.
• Total Hours Worked: Summarized per pay band to assess pay equity.
• Work Locations: Including remote employees working in California.

California introduced this law to increase accountability and ensure fair pay practices. With stricter enforcement and expanded reporting obligations, businesses must prioritize data accuracy and compliance to avoid penalties and legal scrutiny.

To avoid risks, businesses must stay ahead of evolving regulations and ensure their reporting processes meet state standards. Let’s explore how California is enforcing pay data reporting and what non-compliant employers can expect.

How is California Enforcing Pay Data Reporting?

California has intensified enforcement of its pay data reporting requirements, ensuring that employers comply with the latest transparency laws. Senate Bill 1162 (SB 1162) expanded reporting obligations. Non-compliant businesses now face stricter penalties, increased audits, and legal scrutiny.

The California Civil Rights Department (CRD) actively monitors submissions and takes corrective action against non-compliant employers.

Increased Penalties for Non-Compliance

Companies that fail to submit accurate pay data reports now face substantial financial consequences under Gov. Code § 12999(f). California has implemented stricter fines to ensure compliance and discourage employers from neglecting their reporting obligations.

• Employers who fail to submit pay data reports may be fined up to $100 per employee for a first-time violation.
• For repeated violations, penalties increase to $200 per employee.
• Companies that do not report labor contractor data are subject to the same fines, adding financial risk for businesses that rely on outsourced workforces.

These penalties can quickly add up, especially for large organizations. To avoid fines, businesses must ensure timely and accurate reporting while keeping up with any changes to the law.

Audits and Investigations

California isn’t just collecting pay data—it’s actively analyzing reports for inconsistencies, wage disparities, and signs of potential discrimination. The CRD has ramped up efforts to audit employers and verify the accuracy of their compensation data.

• The California Civil Rights Department (CRD) regularly reviews submitted reports for pay gaps across gender, race, and ethnicity.
• Non-compliant employers may be flagged for further investigation, leading to pay equity audits and potential legal scrutiny.
• The state may request additional documentation or conduct workforce analysis to confirm compliance with the law.

Failing an audit can result in fines, public scrutiny, and even lawsuits. Employers should conduct internal pay equity reviews before submitting their reports to ensure compliance and mitigate risks.

Public Disclosure and Reputation Risks

Even if an employer avoids fines, non-compliance can still damage brand reputation and employee trust. While individual company reports remain confidential, California may release aggregated industry-wide data, making disparities visible to the public.

• The state publishes broad pay data trends, which can highlight wage disparities in specific industries.
• Companies that fail to meet pay transparency expectations risk negative media coverage and employee dissatisfaction.
• Candidates and employees are increasingly using pay transparency as a factor when choosing where to work.

Businesses that ignore transparency regulations may struggle to attract and retain top talent. A proactive approach to fair pay practices can protect a company’s reputation while improving employee engagement.

Legal Action and Lawsuits

Beyond audits and penalties, employers that fail to comply with pay data reporting requirements may face lawsuits from the state, employees, or advocacy groups. Legal consequences can be severe, especially if a company has a history of wage disparities.

• Non-compliant employers may face legal action from the CRD, employees, or pay equity advocacy organizations.
• If pay data reveals discriminatory pay practices, businesses could be subject to class-action lawsuits or state-imposed corrective measures.
• Companies that fail to address wage gaps after being flagged may be required to make back-pay settlements or implement mandatory pay adjustments.

Legal battles can be costly, time-consuming, and damaging to an organization’s reputation. Employers should proactively address wage disparities before they become legal liabilities. Employers must adapt their pay data collection and reporting processes to meet the latest compliance standards. 

The next section explains significant updates to California pay data reporting and what they mean for businesses.

Key Updates to California Pay Data Reporting

California’s pay data reporting laws have evolved significantly with the passage of Senate Bill 1162 (SB 1162). These updates expand employer obligations, enhance pay disclosure requirements, and introduce stricter compliance measures. 

Employers must now report more detailed pay data, disclose salary information in job postings, and ensure timely submissions to avoid penalties.

Expanded Reporting Requirements

The updated law widens the scope of pay data reporting, requiring more businesses to comply with transparency mandates.

• Labor Contractor Pay Data: Employers with 100+ workers hired through labor contractors must now file a separate Labor Contractor Employee Report in addition to their standard report.
• Mean and Median Hourly Pay Reporting: Employers must calculate and submit the mean and median hourly rates of employees within each job category, broken down by race, ethnicity, and sex.
• Remote Worker Inclusion: Even if the company is based elsewhere, employees working remotely from California must be included in reporting.

Employers that rely on labor contractors or remote workers must ensure they have access to the required pay data to remain compliant.

Changes to Pay Band and Job Classification Reporting

The new law refines how businesses must classify and report employee compensation.

• No More Consolidated Reports: Employers with multiple locations must now submit separate pay data reports for each establishment rather than one consolidated report.
• Pay Bands Must Follow Federal Guidelines: To maintain consistency, salary ranges must align with the occupational classifications of the U.S. Bureau of Labor Statistics.

These updates create more granular and transparent pay disclosures, helping regulators detect pay disparities more effectively.

Suggested Read: Gain an understanding of salary bands and their benefits in addition to how they improve performance, recruiting, budgeting, and pay transparency. 

Pay Scale Disclosure Requirements

California is increasing public transparency by requiring employers to disclose salary details before hiring.

• Job Posting Pay Transparency:  Employers with 15+ employees must include salary ranges in all job postings, both for internal and external listings.
• Pay Scale Availability for Employees: Current employees can request the pay scale for their position, and employers must provide it.
• Wage History Ban: Employers cannot ask job candidates about past salary histories or use them to determine pay.

Companies must update their hiring and internal pay disclosure policies to meet these new transparency requirements.

New Compliance Deadlines and Penalties

With stronger enforcement, missing deadlines or failing to submit accurate reports now carries greater risks.

• Annual Pay Data Reporting Deadline: Reports must be submitted by the second Wednesday of May each year (e.g., May 14, 2025, is the due date for the 2024 reporting year).
• Higher Penalties for Non-Compliance: Employers failing to submit pay data reports face fines of $100 per employee for first-time violations and $200 per employee for repeat violations.

Failure to comply can result in costly fines, audits, and reputational damage. Businesses must prioritize accurate and timely reporting.

With these changes, California continues to lead the way in pay transparency and equity regulations. Staying proactive can help reduce legal risks, ensure regulatory compliance, and foster a culture of pay fairness.

A well-structured compliance strategy ensures adherence to the law. It also promotes workplace transparency and pay equity. Let’s explore the key steps employers should take to comply with California’s pay data reporting requirements.

5 Steps to Ensure Compliance 

Compliance with California’s pay data reporting laws has become a necessity. Meeting these obligations requires more than just submitting data. Employers must audit pay structures, verify accuracy, and align compensation practices with legal standards. 

A structured approach ensures accurate data collection, timely submissions, and alignment with legal obligations, reducing the risk of penalties and audits.

1. Conduct a Pay Data Audit

Before submitting reports, employers must assess their internal pay structures to identify potential disparities.

• Review salary data by gender, race, and ethnicity to detect wage gaps.
• Ensure accurate job classifications that align with state-mandated categories.
• Verify pay bands and compensation structures to comply with reporting standards.

A pay audit helps identify and resolve pay inconsistencies before they become compliance risks.

2. Standardize Pay Bands 

California requires consistent pay structures based on federal guidelines. Employers should:

• Align job roles with the U.S. Bureau of Labor Statistics’ occupational classifications.
• Define clear pay bands that reflect industry standards and market competitiveness.
• Ensure contractor pay data is collected and categorized properly.

A structured approach to job classification simplifies reporting and reduces errors in submitted data.

3. Verify Employee Pay Data

To comply with SB 1162, employers must accurately compile compensation details across their workforce.

• Gather salary, bonus, and total earnings data by demographic group.
• Track mean and median hourly rates, a new reporting requirement under the law.
• Include total hours worked per employee to provide context for wage assessments.

Employers should leverage HR and payroll software to streamline data collection and minimize errors before submission.

4. Submit Reports on Time

Missing the annual deadline can result in hefty fines. Employers must:

• Submit Pay Data Reports by the second Wednesday of May.
• Ensure reports are filed separately for each establishment, as consolidated reports are no longer permitted.
• Double-check report accuracy before submission to prevent compliance issues.

Timely reporting prevents costly penalties and regulatory scrutiny.

5. Stay Updated on Future Changes

California’s pay transparency laws continue to evolve. Employers should:

• Monitor state regulatory updates and adjust policies accordingly.
• Train HR teams and hiring managers on new compliance requirements.
• Implement pay equity audits regularly to stay ahead of potential disparities.

A proactive compliance strategy reduces legal risks and strengthens workplace fairness.

Suggested Read: Learn how to advance equity in the workplace with actionable insights, real-world examples, and strategies for HR professionals.

Pay transparency and reporting laws aren’t static—they will continue to evolve. Employers must ensure data accuracy, compliance with new regulations, and timely submissions. Manually managing this process increases the risk of errors, delays, and legal scrutiny.

This is where CompUp comes in. By automating pay data reporting, streamlining compliance tracking, and providing real-time pay equity insights, CompUp helps businesses stay ahead of regulatory changes with minimal effort. 

The next section explores how CompUp makes pay transparency compliance easier, faster, and more accurate.

CompUp Simplifies Pay Data Reporting

California’s pay data reporting laws place increasing demands on employers. Gathering accurate compensation data, ensuring compliance with SB 1162, and submitting error-free reports require significant time and effort. Many businesses struggle with inconsistent pay structures, last-minute reporting errors, and evolving regulatory requirements.

Here are a few ways CompUp addresses these challenges:

Centralized Pay Data Management

Manually tracking employee compensation across different job roles and locations can lead to inconsistencies. CompUp provides a centralized compensation management system, ensuring all salary data is accurate, structured, and ready for reporting.

• Store and organize pay band data in one secure platform.
• Easily categorize salary, bonuses, and total earnings based on reporting requirements.
• Automate data updates to prevent discrepancies before submission.

With a single point of reference, employers can avoid reporting errors and ensure consistency across multiple locations.

Automated Compliance Tracking

SB 1162 expands reporting requirements, so keeping up with changing laws is essential. CompUp’s compliance tracking tools help businesses stay ahead of deadlines and legal updates.

• Automated alerts ensure reports are submitted before California’s annual deadline.
• Built-in compliance monitoring tracks evolving pay disclosure laws so businesses remain compliant.
• State-specific reporting insights help multi-state employers align with varying regulations.

By automating compliance tracking, businesses reduce the risk of fines and legal scrutiny.

Pay Equity Audits and Insights

California’s pay data reporting law aims to close wage gaps and promote fair compensation practices. CompUp helps employers identify and address pay disparities before submission.

• AI-driven pay audits analyze salary differences across gender, race, and ethnicity.
• Detect potential compliance risks before submitting reports.
• Generate custom reports to track pay trends and ensure equitable compensation.

By leveraging CompUp’s analytics, businesses can proactively fix pay gaps rather than reacting to regulatory audits.

Effortless Report Generation

Compiling pay data reports manually can be tedious and error-prone. CompUp simplifies this process with automated reporting tools that generate error-free, state-compliant submissions.

• Pre-formatted reports match California’s CRD requirements.
• Automated calculations provide accurate mean and median hourly pay breakdowns.
• Instant submission-ready exports reduce the burden on HR teams.

With CompUp’s automated reporting, businesses can focus on operations instead of compliance complexities.

Transparent Pay Communication

Beyond legal compliance, pay transparency builds trust and improves employee retention. CompUp enables businesses to clearly communicate salary structures with their workforce.

• Generate personalized total compensation reports for employees.
• Equip HR teams with data-backed salary insights to answer pay-related questions.
• Provide structured pay transparency strategies without exposing confidential details.

By embracing transparency, companies foster greater employee trust and engagement while staying compliant.

As California’s pay reporting laws evolve, businesses need efficient, error-free solutions to remain compliant. CompUp removes complexity, eliminates manual errors, and streamlines reporting workflows. With CompUp, employers can focus on business growth rather than compliance risks.

Wrapping Up

California’s pay data reporting laws are evolving, and enforcement is becoming more aggressive. SB 1162 has expanded employer obligations, requiring more detailed disclosures, stricter compliance measures, and higher penalties for non-compliance. Businesses that fail to meet these requirements risk financial penalties, audits, legal action, and reputational damage.

Navigating these requirements manually can be overwhelming, but technology provides a solution.

CompUp simplifies pay data reporting, automates compliance tracking, allows accurate wage disclosures, and reduces the risk of reporting errors. Ensuring compliance today builds a stronger, more transparent workforce tomorrow.

Transform your reporting strategy with data-driven insights. Schedule a demo today. 

Frequently Asked Questions

How does California define ‘labor contractors’ under SB 1162?

A labor contractor is any entity that supplies workers to perform labor within a client company but does not classify them as direct employees. Businesses that use staffing agencies, independent contractors, or temp workers must separately report labor contractor pay data.

Can an employer file a consolidated pay data report for multiple locations?

No, SB 1162 eliminated consolidated reports. Employers with multiple establishments must file separate reports for each location, ensuring pay data is broken down by job site rather than combined.

How does California’s pay data reporting law compare to federal EEO-1 reporting?

While EEO-1 reports require general workforce demographic data, California’s pay data reports demand more detailed compensation breakdowns. This includes pay bands, mean/median hourly wages, and job classifications. Employers must file California’s report separately, even if they submit an EEO-1 to the federal government.

Will California make employer pay data publicly available?

Individual company reports are confidential, but California may publish aggregated industry-wide pay data to highlight pay disparities. This means wage gaps in certain industries may be publicly exposed, even if individual company data remains private.

What are the long-term trends in California pay transparency laws?

California continues to expand pay equity and transparency regulations. Future changes may include stricter penalties, expanded reporting obligations, and greater public disclosure of pay data. Businesses should stay informed and proactively adopt fair, transparent compensation practices.