California Pay Gap Reporting: What You Need to Know

To find the full text, refer to California’s Pay Data Reporting law. The amendments to the pay data reporting law, which will impact reporting starting May 2027, are available here.

A pay data report in California is typically filed by a legal entity. Affiliated entities that comprise an integrated enterprise can, but are not required to, file a combined pay data report covering multiple legal entities. Syndio does not provide legal advice so we recommend you speak with your legal counsel about whether you wish to file as an integrated enterprise.

The requirement in California requires reporting gender and race/ethnicity gaps.

Syndio’s PayEQ solution allows you to run pay and opportunity audits to ensure pay and advancement are truly merit-based and not subject to unlawful bias or discrimination. This ensures fair pay and advancement for all employees and gives you insight into your pay practices.

A payroll employee is an individual on an employer’s payroll for whom the employer is required to withhold federal social security taxes from that individual’s wages.

No. Independent contractors are not considered Labor Contractor employees for California’s Pay Data Reporting law requirement.

In California, the penalties include civil penalties of $100 per employee against an employer who fails to file a required report, with the penalties increasing to $200 per employee for a subsequent failure to file a required report. The new law in California (SB 464) makes these penalties mandatory, starting in Janauary 2026.

The “snapshot period” is used by employers to identify the employees to be included in the pay data report submitted to the government. For the payroll report, the snapshot period is a single pay period between October 1 and December 31 of the reporting year.

On October 13, 2025, Gov. Newsom signed into law SB 464. SB 464 overhauls California’s pay data reporting framework starting with the May 2027 reports and makes fines mandatory for employers that fail to file starting January 1, 2026.

Currently, employers with 100+ workers or labor contractors must file annual reports showing pay by race, ethnicity, and gender within the 10 EEO-1 job categories. The EEO-1 categories are: Executive and Senior Level Officials and Managers, First and Mid Level Officials and Managers, Professionals, Technicians, Sales Workers, Administrative Support Workers, Craft Workers, Operatives, Laborers and Helpers, and Service Workers.

Starting with the reporting due May 2027, employers must instead report pay data by grouping workers into 23 new job categories. The new job categories are: (A) Chief Executives, (B) Management Occupations (except Chief Executives), (C) Business and Financial Operations Occupations, (D) Computer and Mathematical Occupations, (E) Architecture and Engineering Occupations, (F) Life, Physical, and Social Science Occupations, (G) Community and Social Science Occupations, (H) Legal Occupations, (I) Educational Instruction and Library Occupations, (J) Art, Design, Entertainment, Sports, and Media Occupations, (K) Health Care Practitioners and Technical Occupations, (L) Health Care Support Occupations, (M) Protective Service Occupations, (N) Food Preparation and Serving Related Occupations, (O) Building and Ground Cleaning and Maintenance Occupations, (P) Personal Care and Service Occupations, (Q) Sales and Related Occupations, (R) Office and Administrative Support Occupations, (S) Farming, Fishing, and Forestry Occupations, (T) Construction and Extraction Occupations, (U) Installation, Maintenance, and Repair Occupations, (V) Production Occupations, (W) Transportation and Material Moving Occupations.

As most employers do not map or pay jobs this way, which means SB 464 will require mapping jobs to these new categories.

No. Unlike pay gap reporting laws in other jurisdictions, which are available at the company level to the general public, the California pay data report will not be public information. 

Even though the reports are not public-facing, there is still reputational risk for employers. According to the California’s Civil Rights Department (CRD) FAQs, “Employers’ pay data reports allow CRD to more efficiently identify wage patterns and allow for effective enforcement of equal pay or anti-discrimination laws, when appropriate.” Also, the CRD analyzes and releases aggregate data across companies. This matters because a company’s data could be compared — potentially unfavorably — to the CRD’s aggregated dataset.

California’s Equal Pay Act requires that employers with 15+ employees must disclose the wage scale or salary range on every job posting. Employers with any employees in California must provide pay scale information to applicants “upon request” and provide employees the pay scale for their current position upon request. In October 2025, California amended its pay transparency law with SB 642. As noted, employers have long been required to post the pay range they reasonably expect to pay for a role in California. SB 642 changes that to a “good faith” estimate of what the employer expects to pay upon hire. Hiring ranges must now reflect what is actually likely to be offered, not a broad, hypothetical range.

Pay transparency requirements continue to grow across the U.S. There has been a steady drumbeat of new legislation, with states like California that broke pay transparency ground early inspiring others to shape their own unique regulations. See Syndio’s U.S. Pay Transparency Cheat Sheet for the latest list of U.S. jurisdictions that require sharing pay ranges.

Employers must use the Civil Rights Department’s pay data portal to submit their reports. CRD will not accept reports by email or hard copy. Syndio makes it easy to prepare your reports for submission to the CRD.

Syndio provides software and expert professional services to help multinational organizations comply with pay equity, pay reporting, and pay transparency regulations. Syndio helps you analyze, remediate, explain, and report on gaps so you can stay on top of compliance in California. Learn more: https://synd.io/global-pay-reporting/.

The law in California analyzes pay gaps, not pay equity. What’s the difference? 

An unadjusted pay gap (also called an “uncontrolled pay gap”) is the difference between the median or mean pay of two groups, such as men and women.

• Median pay gap: Imagine lining up all the earnings for two groups of employees (e.g., men and women) from lowest to highest. The median pay gap is the difference between the middle earnings in each line. It’s a good indicator of typical pay differences.
• Mean pay gap: This compares the average earnings of each group. However, it can be skewed by extremely high or low earners.

Pay equity, or the adjusted pay gap, accounts for factors that can legitimately explain differences in pay, such as performance ratings, tenure with the company, or location.

The median and mean pay gaps provide valuable insights, but they don’t tell the whole story. There may be legitimate reasons for pay differences between employees. The adjusted pay gap (pay equity) accounts for these factors, revealing whether a pay disparity truly exists (which is unlawful in many countries) so you can take corrective action. Syndio’s PayEQ software is the trusted solution for global enterprises to rapidly identify, address, and prevent pay disparities.