California SB 464 Mandates Stricter Pay Data Reporting Requirements

If you’re on an HR team in California, or have employees working in California, then you’re no stranger  to the annual pay data reporting cycles. The state is making some changes to their report with the signing of Senate Bill 464.  

Here’s What You’ll Learn 

Introduction to California Senate Bill 464 

California’s pay data reporting rules all have a general theme of greater pay transparency, closing gender pay gaps, and employer accountability. SB 464 was signed into law on October 13, 2025, by CA Governor Gavin Newsome, and goes a step further.  

What the Law Currently Requires 

Before we get into the new rules, here’s a quick refresher on the existing California Pay Data Report requirements. 

Under current law, private employers with 100 or more employees, either inside or outside of California, with at least 1 California employee, must file annual pay data reports.  

If you hired 100 or more contractors through the use of a labor contractor, with at least 1 contractor in California, then a second report for those workers is needed. These reports include: 

1. Employee counts by race, sex, and ethnicity across 10 job categories 
2. Pay bands tied to W-2 earnings 
3. Median and mean hourly pay rates by race, sex, and ethnicity 

Employers that fail to file or submit incomplete reports could face penalties of $100 per employee and $200 for additional non-compliance, all at the court’s discretion.  

If you need a refresher on the reporting portal itself, here's a helpful guide from OutSolve.  

Upcoming Changes in 2026 and 2027 

Let’s outline the upcoming changes that will begin in 2026 and into 2027.  

The following changes are effective January 1, 2026 for the 2025 reporting period. 

Employers and labor contractors will be required to collect and store any demographic information for CA pay reporting so that the information is separate from employee personnel records. Many companies already practice this, but they should now audit their recordkeeping practices to make sure they’re in compliance.  

Penalties for non-compliance (failure to file) will become mandatory under the California Civil Rights Department (CRD). Additionally, penalties could extend to Labor Contractors if they fail to provide you with the information necessary to submit the CA Labor Contractor report. 

The following changes will take effect January 1, 2027 for the 2026 reporting period. 

Pay reporting will no longer rely on EEO-1 categories. Employers will be required to classify their employees using the 23 job categories from the Standard Occupational Classification system (SOC), which is an increase from the 10 previous EEO-1 job categories. That’s a marked expansion requiring employers to review how each job title is categorized for their reporting.  

Here’s one scenario. Let’s say that your company uses custom job families or hybrid roles, like “Marketing Operations Analyst.” There may not be a clear or obvious alternative that matches. HR may need to partner with department leaders in order to understand the specific job duties and responsibilities. 

Implementation Timeline 

These 2026 changes apply to reports filed in May 2027, but data collection begins January 1, 2026. That means HR teams need to update systems and processes now. 

What Employers Should Do Now to Prepare 

If you’ve been through a few pay data reporting cycles, then you already know waiting until Q1 is a recipe for long nights. Here’s what HR should prioritize now, well before the 2026 reporting year starts. 

1. Audit Your Job Titles and Job Structures: If you have job titles like “Coordinator II” or “Generalist (Hybrid),” you’re not alone, but SB 464’s new job categories require clarity. Work with HRIS, Compensation, and department leads to re-evaluate: 
   • Job duties 
   • Job families 
   • Exemption status 
   • Internal leveling 
   HR Tip: Partner with compliance experts. OutSolve can help map internal job structures to state-required categories to reduce duplicating work and effort down the road.  
2. Clean Up Demographic Data: Missing race or ethnicity fields can delay your entire report. HR teams can benefit from a Q1 2026 “outreach campaign” asking employees to confirm or update their data. 
3. Coordinate Early with Finance and Payroll: Many companies accidentally report inconsistent values because HR and payroll pull data on different dates. Set your “snapshot date” ahead of time. 
4. Identify and Coordinate with Labor Contractors: It is best practice to identify if you will have to submit a Labor Contractor Report for your organization. If required to submit a Labor Contractor report, begin to coordinate with the Labor Contractor early to ensure timely submission of the data.  
5. Test the Reporting Format (Don’t Wait!): 2027’s standardized file format will take time to adjust to. Even though that requirement is further out, run a mock file export to identify issues early. 
6. Build an Internal Timeline: If your team submits contractor data, has multiple legal entities, or files more than one report, then create a timeline with internal checkpoints, so everyone understands the process to ensure timely submission. 

What SB 464 Means for Your Organization 

With the passing of Senate Bill 464, it brings stricter mandates to California Pay Data Reporting.  It redefines what employers must track, the level of detail required, and the technical format for submissions. The key for HR is early preparation. 

You should treat these changes as a chance to strengthen pay equity practices, clean up job structures, and improve internal data quality. If your team could use a partner to help break down the new rules, prepare your data, or navigate the reporting portal,  OutSolve is ready to help. Contact us today to get started!

Related Resources

• California Employers: SB 294 Requires Immediate Action
• What Employers Need to Know About the California Pay Transparency Law
• Ultimate Guide to California Pay Data Reporting