California Expands Reporting Requirements Ahead of 2026 Deadline
California employers will face a broader set of reporting duties in 2026 under new guidance from the state’s Civil Rights Department (CRD). Preliminary templates and FAQs for the coming cycle outline expanded data fields that must be submitted by May 13, 2026, including new tracking of employee classifications and work patterns.
The updates coincide with statutory reforms under Senate Bill 464, signed in October 2025, which impose mandatory penalties for non‑filing and require demographic information used in reporting to be stored separately from personnel files.
New Data Categories Increase Reporting Complexity
CRD’s new templates introduce three additional required metrics: an employee’s exemption status, employment type, and total annual weeks worked. These categories apply to both payroll employees and labor contractor workers.
Weeks Worked: A Key Legal Risk Area
State guidance defines “weeks worked” as any week in which an employee receives paid time, including vacation, sick leave or holidays. This differs from traditional hours‑based tracking and will require many employers to overhaul how PTO is captured and integrated.
According to Kristie Iacopetta, a partner at Seyfarth Shaw LLP, and Joseph R. Vele, an associate at the firm, the expanded definition creates added compliance risk for employers whose paid‑leave records are housed outside their payroll platforms. They noted that employers relying on “hours worked” may inadvertently underreport weeks worked if they fail to capture paid leave at the week‑level, creating possible discrepancies during CRD review.
The attorneys also said variable‑schedule environments—such as compressed workweeks, on‑call rotations or irregular hybrid schedules—pose added risk because even minimal paid activity within a week triggers “weeks worked” reporting.
Classification Rules Tighten Under State and Federal Standards
Employers must now classify each employee as exempt or non‑exempt under both California’s Industrial Welfare Commission wage orders and the Fair Labor Standards Act.
Iacopetta and Vele said employers should expect elevated legal scrutiny around exemption determinations, noting that misclassification will now be visible in state pay data filings rather than confined to internal HR records. They emphasized that many organizations store exemption status within HR systems rather than payroll feeds, increasing the likelihood of errors if the two systems are not aligned.
New Intermittent Category Opens Compliance Questions
The new requirement to designate employees as full‑time, part‑time, or intermittent adds another layer to classification reporting. The intermittent category applies to employees who work periodically or irregularly.
According to Iacopetta and Vele, the absence of a standardized definition for intermittent employment in most HRIS systems could prompt employers to make judgment‑based categorizations without clear benchmarks. They said employers should document the rationale behind such classifications in case of future agency inquiry.
Labor Contractors Confront Unresolved Reporting Challenges
Employers with 100 or more labor‑contractor workers must file a Labor Contractor Employee Report that incorporates the newly required fields. CRD guidance confirms contractors must provide complete worker‑level data—including weeks worked per client employer.
Public guidance further notes that employees who work for multiple clients within the same week may generate multiple reportable “weeks worked.”
Iacopetta and Vele said the state has not yet provided clear rules on how contractors should allocate paid leave across multiple clients, leaving legal uncertainty that employers will need to address through contractual mandates or data‑sharing agreements. They said early coordination is essential to avoid conflicting or incomplete filings that could trigger penalties.
Mandatory Penalties and New Job Categories Increase Future Risk
Starting in 2026, penalties for failing to file complete pay data reports are mandatory—$100 per employee for an initial violation and $200 per employee for each subsequent one.
The state will also transition in 2027 from 10 EEO‑1 job categories to 23 Standard Occupational Classification (SOC) Major Groups, requiring employers to restructure job‑category assignments across their entire workforce.
Iacopetta and Vele said employers should not underestimate the legal implications of the SOC shift, noting that job categories influence pay‑equity comparisons and could affect how state regulators interpret patterns in compensation data.
Employers Encouraged to Prepare Early
CRD’s final 2026 guidance will be issued in February, but state resources and legal experts recommend beginning preparations immediately. Public guidance highlights the need to revise job descriptions, validate salary structures, and test reporting systems ahead of the filing window.
Iacopetta and Vele said employers should conduct cross‑system audits—spanning HR, payroll, timekeeping and vendor data—to reduce inconsistencies. They also recommend documenting classification frameworks, standardizing contractor data requests, and reviewing internal policies to mitigate enforcement risk.
The Bottom Line
California’s 2026 pay data reporting updates significantly expand employer responsibilities and introduce new legal considerations around exemption determinations, employment‑type classification, contractor reporting and payroll data integration. As regulators increase reporting granularity and move toward a more detailed SOC‑based framework in 2027, legal experts say employers should treat system modernization and data‑quality controls as core compliance priorities heading into the next reporting cycle.
For more information on California pay data reporting, see Checkpoint Payroll Guide ¶19,045g.
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