In 2025, California legislators passed new employment laws that will bring changes to employment contracts, pay data reporting, paid family leave, and other employment-related topics. Employers in California should understand the impacts of the new requirements, new prohibitions, and expanded definitions to current laws. The following list highlights five new California employment laws for employers to be aware of in the year ahead.
Changes to Annual Pay Data Reporting (SB 464)
Senate Bill (SB) 464 brings changes to annual pay data reporting for 2026 and 2027. Current pay data reporting requirements require private employers with 100 or more employees, including certain contractors, to submit annual pay data reports to the California Civil Rights Department (CRD) for a “snapshot” period. The reports cover employee counts by race, ethnicity, and sex across 10 job categories; employee earnings by pay bands (including hours worked); and the mean and median hourly pay rates by race, ethnicity, and sex. Noncompliance carried discretionary penalties of $100 per employee, with an increase to $200 per employee for repeat violations.
Starting in 2026, penalties for noncompliance will become mandatory upon CRD request. Therefore, an employer with 500 employees that fails to file could face $50,000 to $100,000 in fines. If a violation is due to a labor contractor failing to provide the required data, courts may shift part of the penalty to the contractor. Additionally, employers...
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