Changes in 2027 Pay Reporting that Need Attention NOW
Just when you thought you made it through the 2026 new year with all its changes, it’s time to start planning for some important changes in 2027. For those of you who have 100 or more employees and are required to report pay data to the California Civil Rights Department (CRD) each year, now is the time to incorporate the new requirements under Senate Bill (SB) 464, which includes tracking pay data using 23 new job categories aligned with the Standard Occupational (SOC) system, instead of the federal EEO-1 categories used in the past. (see Section 2(b)(1) for category list)
What does this mean in plain English?
Affected Employers
This affects employers who have 100 or more employees with at least one employee in California. This includes employers who may have contractors as part of that workforce.
What Data to Submit
You will need to report a snapshot of pay data for a single pay period between October 1 and December 31 of the reporting year. The data to report is by establishment, by demographic data, and by pay bands. It also includes other data fields such as the number of employees and hours worked. Keep an eye out for resources and worksheets available for 2027 on the Civil Rights Department California Pay Data Reporting webpage.
Changes for 2027
The most significant change under SB 464 is that, beginning with the 2027 filing cycle, employers will have to report on 23 job categories, up from the previous 10 EEO-1 job categories. These new categories are aligned with the SOC groups.
Why Now
The 2027 reporting cycle will use data from the 2026 reporting period, which begins in October 2026. Because there is no automated mapping between the two groups, transitioning the data classifications can be a lengthy and time-consuming process. It is best to get started now so your employees are correctly classified by the beginning of the reporting period.
Steps to Take
Because there is no automated mapping between the two groups, employers will need to:
- Back up your data to preserve history and data integrity
- Run a baseline report (for audit purposes)
- Update the tables in the HRIS/Payroll system
- Map the EEO-1 categories to the new SOC categories
- Assign the new codes to the appropriate job tables if possible. If not possible, they may need to be assigned to each employee. The CRD will also have a worksheet that can be used for importing changes, if that is an option
- Test run the report and compare totals and subtotals to your baseline report to ensure no data was lost or misclassified
- Document the changes and make sure that all pay reporting is maintained separately from personnel files
Internal Audits
This is also a great time to conduct an internal audit of your pay practices and employee classifications.
- • Are there any substantial differences in pay rates between demographic groups in similarly situated roles?
- • Are job descriptions properly classified with respect to exemption status?
- • Are part-time and full-time workers properly classified with respect to ACA definitions?
- • Are contractors included in CRD pay data reporting?
We know that projects such as this can seem overwhelming, and SDHR Consulting is here to help. Contact us if you’d like assistance with your pay reporting compliance, internal audits, or employee classifications.
