Equal Pay Act and Data Reporting

California Pay Equity Laws: Equal Pay Act and Pay Data Reporting Requirements

 

California is a national leader in promoting pay equity through two interconnected frameworks: the California Equal Pay Act and mandatory annual pay data reporting. Together, these laws prohibit all employers  from engaging in discriminatory pay practices and require large employers  to disclose workforce compensation data to help the state identify and address disparities.

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The California Equal Pay Act (Labor Code §1197.5)

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Enacted in 1949 and strengthened by later amendments (including protections for race and ethnicity added in 2017), Labor Code §1197.5 applies to all employers in California,  including private companies of any size and public employers. It prohibits paying any employee less than employees of a different sex, race, or ethnicity for substantially similar work. “Substantially similar work” is evaluated as a composite of skill (experience, ability, education, training), effort (physical or mental exertion), responsibility (degree of accountability), and working conditions (physical surroundings and hazards). Job titles do not need to match. Wages broadly include salary, hourly pay, and other forms of compensation and benefits. Employers generally cannot rely on an applicant’s or employee’s prior salary history to justify pay differences.

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          A. Employer Defenses

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A pay difference is lawful only if the employer proves it results from:

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• A seniority system,

• A merit system,

• A system measuring earnings by quantity or quality of production, or

• A bona fide factor other than sex, race, or ethnicity (e.g., education, training, or experience) that is job-related, consistent with business necessity, applied reasonably, accounts for the entire differential, and is not derived from a protected characteristic.

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          B. Additional Protections (Labor Code §432.3)

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No employer of any size  can ask applicants about salary history (with limited public-records exceptions). Employers with 15 or more  employees must include a good-faith pay scale (expected salary or hourly wage range) in job postings. Upon reasonable request, employers must provide the pay scale for a position.

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          C. Recordkeeping and Anti-Retaliation:

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Employers must retain records of wages, job classifications, and related data for at least three years (plus extended job-title and wage-history records since 2023). Retaliation against employees for discussing wages, inquiring about pay, or enforcing their rights is prohibited.

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          D. Remedies:

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Employees may file claims with the Labor Commissioner or in court. Each unequal paycheck constitutes a separate violation. Remedies include back wages, interest, liquidated damages, reinstatement, and attorney’s fees.

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Pay Data Reporting Requirements (Government Code §12999)

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To support enforcement of the Equal Pay Act and track progress toward equity, California requires annual pay data reporting under Government Code §12999 (originally enacted via SB 973 and amended by SB 1162 and later legislation).

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          A. Who Must Report?

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• Private employers with 100 or more  payroll employees (including at least one working in California).

• Private client employers with 100 or more  labor contractor employees (with at least one in California).

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          B. What Must Be Reported?

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Employers submit aggregated workforce data for a chosen snapshot pay period (typically October–December of the reporting year). This includes employee counts and pay data broken down by job category, race/ethnicity, sex, and other demographic factors. Reports are filed electronically through the California Civil Rights Department (CRD) Pay Data Portal; paper or email submissions are not accepted.

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          C. Timing for Submission

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The deadline is the second Wednesday of May each year. For the Reporting Year 2025, reports were due May 13, 2026. The portal generally opens in early February.

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          D. Consequences of Non-Compliance

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Failure to file by the deadline may result in a court order compelling compliance and potential civil penalties.

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How the Laws Work Together

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The Equal Pay Act (Labor Code §1197.5 and §432.3) sets the substantive prohibition on discriminatory pay, while pay data reporting (Government Code §12999) provides the transparency and data tools the CRD uses to monitor compliance and investigate disparities. Employers should conduct regular pay audits, maintain accurate records, and consult the official CRD handbook and DIR resources for compliance.

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Key Code Sections Covered

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• Labor Code §1197.5 – California Equal Pay Act (core prohibitions, defenses, and remedies).

• Labor Code §432.3 – Pay transparency and salary history protections.

• Government Code §12999 – Annual pay data reporting obligations and deadlines.

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For official guidance, templates, and portal access:

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• CRD Pay Data Reporting: calcivilrights.ca.gov/paydatareporting

• DIR Equal Pay Act: dir.ca.gov/dlse/california_equal_pay_act.htm

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​​​​​For more information, contact us:
 

Email: paul@amanteHR.com

Tel.: (714) 309-9677

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This article is for informational purposes only. It is not intended to be, nor shall it be construed as legal advice or guidance.

Consult with a professional for appropriate advice and guidance.