What You Need to Know About the 2025 California Pay Data Reporting Cycle (Filed in 2026)

In a recent Berkshire webinar, we summarized key requirements and operational considerations for the 2025 California pay data reporting cycle (filed in 2026), including filing thresholds, inclusion rules, required data elements, and preparation steps for both payroll employee and labor contractor reporting.

1. Program Overview

California pay data reporting requires covered private employers to report pay, demographic, and other workforce data to the California Civil Rights Department (CRD) under California Government Code section 12999. Data collection began in 2021, and a labor contractor reporting component was added in 2022. Employers should review CRD filing requirements each cycle as California has made numerous changes to this reporting requirement since it was first adopted.

2. Filing deadline; submission method 

For the 2025 reporting year, the filing deadline is May 13, 2026 (the second Wednesday in May). Covered employers must upload and submit the required materials through the CRD portal and certify the submission in the system.

3. Enforcement exposure for failure to file

The CRD can seek monetary penalties for failure to file: $100 per employee for a first failure and $200 per employee for subsequent failures. For this cycle, courts are mandated to impose fines for failures to file. Berkshire recommends treating timely filing as a compliance priority.

4. Thresholds for filing obligations 

A. Payroll Employee Report

A private employer must file a Payroll Employee Report if it has 100 or more employees total (inside and outside California) and at least one employee in California. The employee-count threshold is based on total employees, not employees located in California.

B. Labor Contractor Employee Report

A private employer must file a Labor Contractor Employee Report if it has 100 or more labor contractor employees total (inside and outside California) and at least one labor contractor employee in California.

5. Inclusion and exclusion rules (who must be reported)

Included population

Berkshire recommends identifying the filing population using a single snapshot payroll period selected between October 1 and December 31 of the reporting year. Included employees are those who either:

- work in California; or

- are assigned to, or report to, a California establishment during the snapshot period.

This includes: 
- employees physically working at a California establishment; 
- remote employees living in California who report to an establishment outside California; and 
- remote employees living outside California who report to an establishment in California.

Excluded population

The CA CRD materials instruct employers to exclude the following workers:

- 1099 workers are not included. 

- Employees who live outside California and report to an establishment outside California are not included. 

6. Payroll Employee Report: required information (high level)

Employer-level information

We recommend carefully verifying required employer identifiers and the totals, including employee totals, establishment totals, and the snapshot date selected within the stated range. The CRD cross-checks portal totals against the uploaded file totals; inconsistencies may produce upload errors.

Establishment-level information

Employers should ensure each establishment record is complete, including establishment name and physical address, NAICS code and description/major activity, headquarters indicator, prior-year reporting indicator, and the total number of California employees assigned to the establishment.

Employee-level information (required fields)

Required employee-level elements include race/ethnicity, sex, establishment location and/or remote status, job category (EEO-1 category for this cycle), annual earnings (W-2 Box 5; Box 1 may be used if Box 5 is not available), annual hours worked, and—new for this cycle—annual weeks worked, exempt status, and employee type (full-time, part-time, intermittent).

In 2025, California also included a specific provision requiring that employers and labor contractors must store demographic data collected for these reports separately from employee personnel records. Although this has always been a best practice that many employers already follow, Berkshire recommends confirming internal data storage practices align with this requirement.

Aggregation and required calculations

Employers should plan for an aggregation-based reporting process rather than individual employee line reporting. Employees are aggregated into groupings based on shared attributes (including job category, combined race/ethnicity/sex code, pay band, exempt status, and employee type), and employers must provide group counts and related calculations, including remote/non-remote counts and mean/median hourly rate computations, plus totals for hours and weeks worked (including paid time off).

7. Labor Contractor Employee Report: required information (high level)

Applicability and definitions

Employers need to carefully review the CRD definitions to determine whether they must file this part of the report and what data they should include. A labor contractor is an entity supplying workers to perform labor within the client employer’s usual course of business. A labor contractor employee is on the labor contractor’s payroll (with applicable withholding) and performs labor for the client employer within the employer’s usual course of business.

Data sourcing and responsibility allocation

Effective compliance depends on early data coordination:

- the employer supplies employer establishment information in the template; and 

- the labor contractor provides the labor contractor employee-level data required by the template. 

Recommended operational steps 

Berkshire recommends: 

- distributing the CRD labor contractor template early in the cycle; 

- instructing each labor contractor to select a snapshot payroll period between October 1 and December 31 (labor contractors are not required to use the same snapshot period); and 

- performing reasonable checks upon receipt and consolidating all labor contractor files into one master file for submission. 

8. Forward-looking issue: change in job classification basis (next cycle)

Berkshire recommends that employers start planning for an upcoming change applicable to the 2026 filing cycle: job categorization will shift from EEO-1 categories to 23 SOC codes. Employers should determine where SOC code data will be obtained, how it will be assigned, and how it will be maintained. Berkshire can also offer assistance in slating jobs into the correct SOC category for the new filing cycle.

9. Review your pay data before you submit

To prepare your company for this increased scrutiny, Berkshire recommends that you review your pay data before you submit it to the state. We can perform a California Statistical Wage Gap Analysis, which will help you identify any areas of possible concern that may be flagged by the CRD. We can also help you reclassify your employees into the more detailed occupational codes now so you can get ahead of any concerns. Need assistance?

If you would like support with your California pay data reporting, contact Berkshire.