Posted September 22nd, 2026 in Top Stories, Legal Insights with Tags Pay equity

California’s New Pay Data Reporting Requirements Are Coming: What Employers Need to Know Before 2027

Employers that file annual pay data reports with the California Civil Rights Department (CRD) are facing a significant overhaul of the reporting framework, with the most substantial structural change taking effect for the report due in May 2027. Employers who wait until then to start preparing will likely find themselves behind.

In October 2025, Governor Newsom signed Senate Bill 464, amending Government Code Section 12999 and reshaping California’s pay data reporting obligations for covered employers. This includes private employers with 100 or more U.S. employees, as well as those who hire 100 or more workers through labor contractors, provided that at least one employee or worker is based in California. Some of the law’s changes, including mandatory penalties for failure to file and a requirement to store employee demographic data separately from personnel records, are already in effect. But the change most likely to require lead time is still ahead: a complete replacement of the job classification system employers use to report their workforce data.

Out With EEO-1, In With SOC

For years, California pay data reports have used the same 10 broad job categories drawn from the federal EEO-1 form, including categories like “Professionals,” “First or Mid-Level Officials and Managers,” and “Administrative Support Workers.” Starting with the 2026 reporting cycle (the report due in May 2027, covering 2026 workforce data), that goes away. Employers will instead have to sort every California job title into one of 23 major occupational groups drawn from the federal Standard Occupational Classification (SOC) system.

The jump from 10 to 23 categories is more than a bigger drop-down list. The EEO-1 categories used previously were broad enough that most employers could sort employees relatively quickly. The SOC framework is more granular and organized around occupation rather than organizational level. Accordingly, many roles that previously landed together in one bucket — engineers, pharmacists, accountants, nurses, and lawyers, for example, all sat under “Professionals” — will now need to be separated into distinct SOC categories. Because no official framework exists for aligning the former EEO-1 categories with the SOC structure, employers will need to develop their own title-by-title classification process and make judgment calls for roles that do not fit squarely within a single SOC category.

The change also may make it more difficult to interpret workforce and compensation data over time. Because SOC categories will not line up cleanly with the EEO-1 categories used in prior filings (or with the EEO-1 report itself, to the extent employers still track that data), organizations may see shifts in their reported pay and demographic patterns that reflect a change in categorization rather than a change in the underlying workforce. Getting ahead of this issue now, with an eye toward a defensible and consistent classification methodology, will matter both for accurate reporting and for explaining the numbers if they are ever questioned.

Practice Pointers

To ease the transition to the new reporting framework, covered employers should consider the following steps:

• Start the job title audit. Inventory every job title used in California to begin assigning each to one of the 23 SOC categories.
• Build in a review step for hard-to-classify or borderline cases. Identify roles that historically sat in broad EEO-1 categories (particularly “Professionals” and management titles) and confirm how each should be split out under the SOC framework.
• Document classification decisions. Create a written methodology explaining how job titles were assigned to SOC categories, including any assumptions or judgment calls. Consistent documentation will help ensure classifications remain uniform over time, particularly as personnel changes occur or questions arise regarding reported data.
• Check your HRIS. Confirm that your systems can store and maintain SOC category assignments for each job title. Building this functionality now will promote consistency across classifications, reduce future reporting burdens, and streamline the process of assigning categories to newly created positions.
• Loop in labor contractors early. The new SOC requirement applies to both Payroll Employee Reports and Labor Contractor Employee Reports. If your organization utilizes 100 or more contracted workers, communicate with labor contractors well in advance of the May 2027 reporting deadline to ensure they understand the new requirements and are prepared to provide accurate workforce data categorized according to the SOC framework.
• Coordinate with compensation professionals and legal counsel. Because pay data reports are often scrutinized for potential pay disparities, employers should consider involving compensation professionals and counsel early to identify whether the new classifications could alter how pay patterns appear in future reports.

California’s shift toward a more detailed reporting framework reminds employers that state-level pay data obligations are only becoming more demanding, even as federal reporting contracts. As discussed in “The End of EEO-1 Reporting? What Employers Stand to Lose,” the EEOC’s move to rescind EEO-1 reporting does not relieve employers of the underlying need to track workforce data; if anything, states like California are stepping into that vacuum with their own, more complex requirements.