California Pay Data Reporting: 2025 Deadline, New MENA Category, and Updated Filing Requirements

The 2025 deadline for California pay data reporting brings updated requirements, including MENA classification and new employer obligations. Covered employers must submit demographic wage data by job role, gender, race, and pay band or face financial penalties.

By Douglas Wade, Attorney

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Have a quick question? We answered nearly 2000 FAQs.

Table of Contents

1. Introduction

2. SB 1162: What is it?

3. Who must submit a report in accordance with SB 1162?

4. Is my production enterprise subject to the revised pay data reporting rule even though we haven’t previously submitted Federal EEO-1 filings for our population of production workers because of a temporary employee Federal EEO-1 exception?

5. What effects will SB 1162 have on the entertainment sector?

6. What happens if my company employs 100 people or more overall, but fewer than 100 people work in each division or affiliated company?

7. Why is the term “labor contractor” important for the purpose of filing under California pay data reporting legislation, and what does it mean?

8. Must I report on employees who work remotely?

9. Should an employee be listed as a remote worker in their wage data report if they switched from a remote position for the first half of the year to an in-person or hybrid capacity for the second half of the year?

10. What penalties will apply if this new salary data reporting law is broken?

11. Why is this information needed by the government of California?

12. What reports are required?

13. What happens if a worker chooses not to freely disclose their race or ethnicity?

14. What happens if I run several businesses?

15. How is the State’s report filed?

16. How should you go if you believe you may have to file?

Introduction

The deadline for submitting reports under California pay data reporting legislation, SB 1162, is May 14, 2025.

The most frequently asked questions concerning SB 1162 in adhering to the new law will be addressed in this article.

SB 1162: What is it?

California approved Senate Bill 1162 in September 2022 which will have a major effect on the employers that work within the state and will transform the landscape of California pay data reporting. This piece of legislation improves the ability of companies in California to report yearly demographic pay information to the California Civil Rights Department (California Department of Fair Employment and Housing, “CRD”).

Who must submit a report in accordance with SB 1162?

An employer might initiate the filing obligation in one of the two ways:

1. More than 100 workers who were hired directly by the company during the year (referred to as payroll worker reports by CRD), or

2. Having procured labor from any number of labor contractors throughout the calendar year, together employing 100 or more workers (a group known as labor contractor worker reports in CRD).

Even if an employee operates remotely outside of California but is otherwise allocated to or communicates with the employer’s California location, at least a single worker must be employed there.

Employers may be required to file different payroll employee reports and different labor contractor worker reports for each of these employee categories, since they may have either or both of the employee populations. Employers are required to file with the State if they meet one or both of the aforementioned employee population limits.

The CRD’s guideline makes it clear that even in cases where payroll is handled by an outside firm, the company that employs the workers is nonetheless responsible for filing. Within the entertainment sector, this implies that studios and production businesses must disclose since they employ the production staff.

Is my production enterprise subject to the revised pay data reporting rule even though we haven’t previously submitted Federal EEO-1 filings for our population of production workers because of a temporary employee Federal EEO-1 exception?

In agreement. Whether or not the employer is obliged to submit a Federal EEO-1 report, SB 1162 now mandates that covered employers submit a pay data report or reports to the State, subject to California pay data reporting requirements.

What effects will SB 1162 have on the entertainment sector?

SB 1162 will significantly affect the entertainment sector. Production businesses and studios will be required to track crew and talent by gender and race/ethnicity, as well as report annual salary (W-2 earnings) throughout the ten job categories, as they are the accountable covered employer. Additionally, SB 1162 mandates that covered companies submit a pay record or files to the State, even if they are not obliged to submit a Federal EEO-1 record.

What happens if my company employs 100 people or more overall, but fewer than 100 people work in each division or affiliated company?

Every employer must speak with their personal legal counsel about this matter. The solution to this question is not universally applicable. In its frequently asked questions here, the CRD did, however, offer some clarification on this matter.

Why is the term “labor contractor” important for the purpose of filing under California pay data reporting legislation, and what does it mean?

A “labor contractor” is a person or organization that provides labor to a client employer in the client employer’s regular course of enterprise, either under a contract or not.

As previously mentioned, employers who employ the required number of labor contractors are required to submit an individual labor contractor statement to the State. Along with the same reporting criteria as the employer’s payroll worker report, this distinct report additionally needs to include specific information that distinguishes every labor contractor.

Employers are obliged to collect the demographic pay information from every labor contractor in order to submit this individual report. The duty to file with the State rests with the employers of covered production companies, not the staffing contractor. Additionally, the employer’s Snapshot Period for its payroll worker report may differ according to the Snapshot Time it selects for the labor contractor reporting.

Must I report on employees who work remotely?

Indeed. If workers worked remotely in the Snapshot Period, employers are required to disclose it.

An employee who works totally remotely, teleworks, or from home and is not expected to routinely report in person at a physical location to perform work tasks is referred to as a “remote worker” under labor contractor or payroll laws.

Employees with hybrid jobs or (partial) remote-working arrangements who are scheduled to work in-person at a specific establishment for any amount of time in the Snapshot Period won’t be classified as remote workers for the purposes of reporting pay statistics.

Should an employee be listed as a remote worker in their wage data report if they switched from a remote position for the first half of the year to an in-person or hybrid capacity for the second half of the year?

Yes. The Snapshot Period should be used by employers to decide whether or not to designate a worker as remote. A staff member shouldn’t be classified as a remote worker if, over the Snapshot Period, they were obligated to come in attendance at a physical location, regardless of whether they operate remotely at additional times of the year.

What penalties will apply if this new salary data reporting law is broken?

There will be significant financial penalties beginning in 2023. Failure to file the appropriate reports can result in a civil fine of as much as $100 per worker for the first violation and as much as $200 per worker for successive offenses.

A court order compelling the company to adhere to the filing mandate may also be sought by the CRD. The court proceedings would be public record, and the CRD has the right to reimbursement for the costs incurred in requesting the ruling for compliance.

Why is this information needed by the government of California?

The goal of California pay data reporting is to enable the government to spot wage trends that indicate unwarranted pay disparities between genders and ethnic groups. This will help the CRD better enforce anti-discrimination and equal pay laws in California. This is anticipated to lead to additional CRD investigations and convictions of firms whose demographics’ pay data indicates pay disparity to the CRD.

What reports are required?

Every year, SB 1162 mandates that covered companies provide the CRD with a pay data record covering the year before, or the “Reporting Year.” The employer is required to select a Snapshot Period for that Reporting Year, which is one complete pay period that takes place between the first of October and the last day of December of that year.

The demographic compensation information of California workers who worked during that Snapshot Period has to be included in the pay data report; employees who worked out of the relevant Snapshot Period, even if they worked during other times of the identical Reporting Year, aren’t included in the report.

Within the selected Snapshot Period, the report must determine the number of workers by three gender categories and 7 different ethnicity/race categories across ten distinct employment categories. Additionally, the report must specify the number of workers by gender and race/ethnicity whose yearly salaries fall within every one of the twelve earnings tiers (commonly known as “pay bands”) that the US Bureau of Labor Statistics uses.

Using the previously mentioned categories, the company must also determine and report the number of hours worked as well as the median and mean hourly wage rate for each category of workers in the different permutations.

Additionally, the employer is required to report on the aforementioned by breaking down the wage information by each of their “establishments” that employed at least 1 Californian during the Snapshot Period. An economic entity that produces services or products is referred to as an “establishment.” A studio, a specific building or office, or a specific production are a few examples of establishments in the entertainment sector.

What happens if a worker chooses not to freely disclose their race or ethnicity?

Employers are required to report employees based on one of the 7 ethnicity/race categories, in a particular order: Present employment information, other trustworthy information or records, or observer understanding, even if the employee chooses not to freely give their race/ethnicity.

This approach should only be taken after a sincere attempt has been made to get the worker’s race and ethnicity information willingly or from other trustworthy sources. Employers are encouraged by CRD to use the explanatory remarks area to indicate that they have used observer perception. For instance, “The ethnicity/race of employees in this employment category has been determined according to observer perception.”

The ethnicity and race of labor contractor employees must be reported by employers in the Labor Contractor Worker Reports. Employers may record “unknown” ethnicity/race for a specific labor contractor worker under specific conditions for the 2022 Reporting Year, but starting in 2023, this choice will no longer be available.

What happens if I run several businesses?

A multi-establishment business is required to provide an integrated report that covers all of its locations and reports on each of them separately.

How is the State’s report filed?

For the company to provide the data, it must first register on the CRD’s website. The report has to be turned in electronically by filling out the form on the government’s reporting website or by submitting a CSV file or an Excel file that meets the CRD template specifications.

How should you go if you believe you may have to file?

Examine your staff both nationally and in California to see if your business is protected. If covered, you will have to assess your ability to collect and report the needed pay and demographic information using the CRD-mandated template, including the different combinations of ethnicity/race, job category, gender, and pay bands.

Have a quick question? We answered nearly 2000 FAQs.

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California Pay Data Reporting: 2025 Deadline, New MENA Category, and Updated Filing Requirements

Introduction

SB 1162: What is it?

Who must submit a report in accordance with SB 1162?

Is my production enterprise subject to the revised pay data reporting rule even though we haven’t previously submitted Federal EEO-1 filings for our population of production workers because of a temporary employee Federal EEO-1 exception?

What effects will SB 1162 have on the entertainment sector?

What happens if my company employs 100 people or more overall, but fewer than 100 people work in each division or affiliated company?

Why is the term “labor contractor” important for the purpose of filing under California pay data reporting legislation, and what does it mean?

Must I report on employees who work remotely?

Should an employee be listed as a remote worker in their wage data report if they switched from a remote position for the first half of the year to an in-person or hybrid capacity for the second half of the year?

What penalties will apply if this new salary data reporting law is broken?

Why is this information needed by the government of California?

What reports are required?

What happens if a worker chooses not to freely disclose their race or ethnicity?

What happens if I run several businesses?

How is the State’s report filed?

How should you go if you believe you may have to file?

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