Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
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. Senator Smallwood-Cuevas (D, 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 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 SB 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 non-filer if the CRD requests it.
Lastly, the bill would require public employers1 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 business.
SB 464 was introduced on February 20, 2025, by Senator Smallwood-Cuevas and has listed principal co-authors Senators Richardson and Weber Pierson, along with Assemblymembers Bonta, Bryam, Elhawary, Gipson, Jackson, McKinnor, Ransom, Sharp-Collins and Wilson. Such bicameral support indicates this bill is likely to get 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.
See Footnotes
1 Although not defined in this legislative proposal, this is likely to include state and local governmental entities, possibly including public universities. The CRD often uses guidance from the EEOC. The EEOC requires state and local entities to file EEO-4 pay data reports.
