Important Update: Preliminary Guidance for California’s 2025 Pay Data Reporting Presents Broader, More Complex Compliance Requirements

Seyfarth Synopsis: California’s Civil Rights Department (CRD) released updated FAQs and Pay Data Reporting templates for payroll and labor contractor employees in advance of the 2025 Pay Data Reporting cycle.  Unless the “preliminary” materials are revised, employers and labor contractors will need to include new data fields such as exemption status, employment type, and weeks worked for the reports currently due on May 13, 2026.  The final guidance materials, including the operative templates, FAQs, and updated User Guide, is scheduled for release in February 2026.

California’s Pay Data Reporting requirements have evolved rapidly in recent years, and CRD shows no signs of slowing down.  While many are focused on the changes to the reporting categories for reports that will not be due until May 2027 (see, Seyfarth California Pay Data Reporting Amendment Update), without fanfare, CRD updated its website with published preliminary FAQs and templates for the Payroll Employee Reports and Labor Contract Employee Reports that will impact the filings due on May 13, 2026.  Unless changes are made before the template materials are finalized and released, employers and labor contractors will need to make adjustments to address the significant changes.  The final guidance materials are expected in February 2026, so it is important that employers and labor contractors are aware of the changes now as they prepare for the 2026 filing requirements.

As a reminder, California expanded its pay data reporting obligations in 2022 to cover both payroll employees and labor contractor employees.  Then in January 2024, CRD issued significant updates for the 2023 reporting period, including revised FAQs, updated templates, and a new User Guide.  Those changes introduced new definitions, clarified prior guidance, and added requirements such as remote-work reporting and the prohibition on “unknown” demographic values for labor contractor reports.  CRD frequently updates its guidance, often without notice throughout each cycle, and this year is no different.

Because California requires two separate and distinct submissions—one for payroll employees and another for labor contractor employees—the reporting process is inherently complex.  CRD compounds this challenge by introducing changes to the reporting framework almost every year through new FAQs and updated templates.

Here, we examine the key issues addressed in the new FAQs and templates, focusing primarily on the new requirements and substantive changes from previous reporting obligations.

New Data Fields for 2025

For Reporting Year 2025, CRD introduces three new data elements that employers must capture: (1) exemption status, (2) employment type, and (3) weeks worked during the reporting year.  These fields apply to both payroll employees and labor contractor employees and represent a significant expansion of the reporting framework.  Employers should review their HRIS and payroll systems now to ensure these data points can be accurately tracked and aggregated, and connect with their third-party labor contractors to ensure they are prepared to provide this new information as well.

Exemption Status

CRD will require data that classifies each California worker as either “Exempt” or “Non-exempt” under the minimum wage and overtime provisions of California’s Industrial Welfare Commission wage orders and/or the federal Fair Labor Standards Act.  This classification will be reported for every employee group in the pay data report.  This change means that while exempt and non-exempt workers were historically grouped together, they will now be separated into different employee groupings based on their exemption status as well as their race/ethnicity, sex, job category, and pay band.

Employment Type

Employers must also report each California employee’s employment type using one of three categories: “Full-time,” “Part-time,” or “Intermittent.” The following explanations are provided in the FAQ for each category.

• Full-time employees are those that “regularly work full-time hours under the employer’s standard or alternative workweek schedule.”
• Part-time employees “regularly work less than full-time hours under the employers standard or alternative workweek schedule.”
• Intermittent employees are assigned to “periodically or irregularly work full-time or part-time hours, under the employer’s standard or alternative workweek schedule.”

Thus, it may be necessary to review how these classifications apply to hybrid or variable-hour roles given that CRD is applying a distinction for “intermittent” workers that may not be currently captured in company HR systems. 

Weeks Worked

In a new twist, covered entities will need to provide more than just hours worked.  Unless changes are made before the final guidance is released, submissions are to include the total number of weeks worked during the reporting year for each California employee, including weeks during which the employee was on paid time off (such as vacation, sick leave, or holidays).  

After classifying employees into groups based on race/ethnicity, sex, job category, pay band, exemption status, and employment type, employers should aggregate the total weeks worked for all employees in each group and report this as “Total Annual Weeks Worked.” If an employee is the only one in a group, report their individual weeks worked.  For labor contractor employees, weeks worked refers to the actual number of weeks worked for the reporting client employer.  Since this metric requires annual aggregation, employers should validate their timekeeping and payroll systems now to ensure they can capture and sum weeks worked accurately across the reporting year.

Operative Templates and Timing

The operative templates, FAQs, and updated User Guide are expected to be published in February 2026, when the pay data reporting portal opens.  CRD provided a notice with the materials that describes them as a “simplified version” of the operative templates that are intended to “help filers become familiar with the expected format and data fields” that will be required for the May 2026 filings.  CRD notes that the preliminary templates are subject to change, however, employers should use the preliminary templates now to familiarize themselves with the expected structure and begin preparing for the upcoming data collection processes given the new complexities CRD has introduced into an already cumbersome reporting requirement.

Next Steps

These new data fields will significantly increase the burdensome nature of the California pay data reporting due in May 2026 .  Early preparation—particularly around updating data queries to capture the exemption status, employment type classification, and “weeks” of work—will be critical to avoid compliance issues.  Employers who are required to submit Labor Contractor Employee Reports should coordinate with their labor contractor partners early to ensure timely availability of the required data.

Seyfarth will continue to monitor developments and provide updates as additional details emerge.  For additional questions or assistance, please contact the authors of this alert, a member of Seyfarth’s People Analytics team, or any of Seyfarth’s attorneys.