Do You Pay Employees Fairly? California Wants to Know.

According to the Bureau of Labor Statistics, U.S. women still earn roughly 83 cents for every dollar earned by men. Pay gaps also exist for most racial and ethnic minority groups. Even when performing similar work, data reflect that pay inequities still persist. One way that California combats this is by requiring large companies to annually report their pay data to California’s Civil Rights Department (CRD).

In fact, pay data reporting has become one of the most powerful enforcement tools in the fight for pay equity. Covered companies must provide the State a detailed snapshot of how they actually pay their workforce, broken down by race, ethnicity, sex, and job category. The CRD may use this information to spot patterns of potential discrimination, launch investigations, and hold employers accountable. This is why you should make sure you have a clear understanding of the requirements, start your pay data report early, and consult legal counsel as needed on questions of what you must or should include.

So, what is required and who is covered? We break it down for you below:

California Pay Data Reporting

Who: Applies to private employers with at least 100 employees, as long as you have at least one employee located in California. The law also applies to employers with at least 100 labor contractor workers, which is defined as an individual on another’s payroll who performs labor for you, such as those hired through staffing agencies.

What: For each establishment, employers should count and report the number of employees (or labor contractor workers) for each combination of reporting categories: race/ethnicity, sex, job category, and annual earnings in the “snapshot period.” The snapshot period is a single pay period the employer selects between October 1 and December 31 of the reporting year (i.e., 2025).

Where: Covered employers must submit their pay data report(s) to CRD through the California Pay Data Reporting Portal.

When: The deadline to submit to CRD is on or before the second Wednesday of May of each year. For 2025 pay data, the submission deadline is May 13, 2026. Importantly, beginning in 2026, penalties for noncompliance will become mandatory upon CRD’s request.

The CRD has a number of resources to assist employers in understanding and satisfying the requirements.

Don’t Forget About Federal Requirements!

Similar to California’s pay data reporting requirement, the EEO-1 Component 1 report is a mandatory annual data collection that requires all private sector employers with 100 or more employees to submit demographic workforce data, including data by race/ethnicity, sex, and job categories.

Federal contractors with 50 or more employees meeting certain criteria have also been required to file EEO-1 Component 1 reports.

Each year, the EEOC establishes a filing window and deadline for this annual federal reporting requirement. The agency has not yet announced the 2026 dates. Last year, the filing deadline was June 24,2025. Stay tuned!

Need a referral to legal counsel? CEA’s vetted attorney partners offer a free 15-minute initial consultation to CEA Members!

What About Smaller Employers?

While smaller employers may be off the hook for pay data reporting, you should still audit your pay practices to ensure fair compensation. California’s Equal Pay Act – which applies to all businesses regardless of size – prohibits employers from paying an employee less than what you pay another employee of a different sex, race, or ethnicity for substantially similar work.

Also, a new 2026 law (SB 642) expanded on equal pay protections by clarifying pay transparency requirements, making the Equal Pay Act inclusive to non-binary workers, and extending the time period for employees to recover damages for violations. Learn more in CEA’s article here.