As employers deal with all the changes at the federal level, they should also be mindful of potential changes at the state level, specifically in California. As we see companies evaluating the type of data they are collecting from their employees in light of the many executive orders issued by the new administration, we wanted to provide an update on a new bill that has been introduced in California that could result in changes to the California Pay Data filing report in 2026.
State Sen. Lola Smallwood-Cuevas (Democrat, 28th Dist.) introduced Senate Bill 464 this legislative session, which would expand the filing requirements for the annual reports filed with the Civil Rights Department (CRD). If enacted, key changes for the 2026 reporting cycle would include:
Additional data: Employers would be required to report on sexual orientation. Currently, employers are required to report on the number of employees by race, ethnicity, and sex. The statute would be expanded to include reporting by sexual orientation. The bill directs employers to collect and store any demographic information for pay data purposes separate from the employees’ personnel records. Information regarding an employee’s sexual orientation would be collected only if “voluntarily disclosed” by the employee.
Make it public: The bill would require the CRD to publish the pay data reports filed by private employers on their websites, so long as the publication of the data is reasonably calculated to prevent the association of any data to a particular person. This language was stricken in 2022 from Senate Bill 1162, California’s pay transparency law, but has now made its way back into this proposal.
New penalties: The bill would require a court to impose a civil penalty and would remove judicial discretion. As it currently stands, if the CRD does not receive a required report from an employer, it may seek an order requiring the employer to comply with the filing requirements. The CRD is entitled to recover the costs associated with seeking an order. Upon the CRD’s request, a court currently may impose a civil penalty against an employer in the amount of $100 per employee for the first violation and $200 per employee for the second and subsequent violations. Under SB 464, a court would be required to assess penalties against the nonfiler if the CRD requests it.
Lastly, the bill would require public employers with 100 or more employees to file the annual pay data report beginning in 2027. There is, however, no such requirement for public employers to file the labor contractor employee report, which is a requirement for all private businesses.
Bicameral support for this bill indicates the chances are good that it gets through both houses. It has not yet received a hearing date, nor has it been assigned to its first committee. Stay tuned for future updates this spring.
Joy C. Rosenquist is an attorney with Littler in Sacramento, Calif. Chris Gokturk is executive director of Federal Compliance and Reporting with Littler in Tysons Corner, Va. © 2025 Littler. All rights reserved. Reposted with permission.
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