Preparing Now for California’s Updated Pay Data Reporting Requirements

Seyfarth Synopsis: Now that the 2025 deadline for California pay data reporting has passed, employers should begin preparing for the significant changes that will be required for future California pay data reports. Beginning with reports due in May 2027, employers will be required to report employee data using SOC major occupational groups rather than the traditionally used EEO-1 job categories. Because many employers have not historically classified jobs using SOC categories, advance planning will be critical to minimize disruption and ensure accurate reporting. 

As previously described here, late last year, Governor Newsom signed Senate Bill 464 into law, implementing several key changes to California’s annual pay data reporting obligations under Government Code Section 12999. The law requires employers with 100 or more U.S. employees to submit annual reports to California’s Civil Rights Department (CRD) containing pay and demographic information for their California employees. There is also a similar reporting requirement for employers utilizing 100 or more third-party labor contractor employees.  The amended law impacts both types of reports and requires new reporting categories. 

Beginning with the 2026 reporting cycle (due May 2027), California is moving away from the traditional EEO-1 job classification system and will instead require employers to group employees according to the 23 major job categories from the Standard Occupational Classification (“SOC”) system.  This represents a significant change that will require employers to reassess how each job title is classified for reporting purposes.

For federal government contractors, employers that use SOC classifications for immigration purposes, and employers in states such as Washington or South Carolina that already incorporate SOC codes into certain reporting requirements, the transition may be more manageable because they are likely already familiar with the SOC framework and may have existing SOC job classification processes in place.  However, for other employers who have not assigned SOC classifications to each job title, the change will be significant, as it requires them to assign each job title to one of the 23 SOC major job categories.

The shift introduces additional complexity and workload to a reporting obligation that is already viewed as burdensome, particularly with regard to labor contractor reporting requirements. To prepare, employers will need to cross-walk legacy EEO-1 assignments for each job in the organization to the new SOC categories, resolve edge-case roles that do not fit neatly into a single classification, and manage year-over-year comparability issues that may no longer align with other required reports, including the EEO-1. For example, roles previously grouped under the broad “Professionals” category (such as lawyers, scientists, and architects) will now require separate categorization, further increasing administrative effort and the potential for inconsistency across filings.

The new categories apply to both payroll employees and labor contractor employees, which may require coordination with third-party “labor contractors” as defined in California to ensure proper classifications are in place. 

Recommendations

Given the substantial modifications that will apply to some organizations, employers should begin preparing for the new reporting requirements as follows:

• Evaluate whether each job title used in California already has an assigned SOC code;
• If job titles have not already been assigned SOC classifications, implement a workflow to assign job titles to one of the 23 new SOC major job categories in preparation for the upcoming 2027 filing requirements;
• Evaluate system capabilities to electronically store and maintain SOC job category assignments for each job title to ease future reporting burdens;
• Implement processes to ensure SOC classifications are assigned when new job titles are added into the company’s job architecture;
• Implement a process now to ensure labor contractors are aware of the change so that they are prepared to provide the required data in alignment with the new SOC categories.

For some employers, the process of aligning job titles to the new SOC categories will be significant. For others, the process may be more familiar, although gaps may still exist for positions that have not previously been associated with a SOC classification. Because the new reporting framework will require compensation data to be reported within these SOC categories, employers should take care to develop a consistent and defensible methodology for assigning jobs to the appropriate classifications.

If you missed our initial update regarding all of the amendments to California’s pay reporting obligations under Government Code Section 12999, please see our prior update here. For additional information and support regarding developing and implementing a process for assigning SOC classifications, please contact the authors of this alert, a member of Seyfarth’s People Analytics team, or any of Seyfarth’s attorneys.