Quick Hits
- Private employers with one hundred or more employees in the United States with at least one employee working in California are required to file relevant payroll employee and labor contractor employee reports each reporting year.
- Employers are currently subject to a penalty of up to $100 per employee for a first violation and $200 per employee for a subsequent violation for failing to file.
- Recent amendments under SB 464 require courts to impose civil penalties on noncompliant employers and, beginning January 1, 2027, will increase the number of reportable job categories from ten to twenty-three.
- SB 1237, which would raise the penalty for second and later violations up to $1,000, is currently pending Governor Newsom’s signature.
The New Enforcement Actions
On September 14, 2026, CRD filed separate petitions to compel compliance against two employers for failing to submit required pay data reports under California Government Code Section 12999. Both employers had previously filed pay reports but failed to continue to file reports for multiple years even after being reminded of their reporting obligations.
California Food Management LLC (d/b/a Burger King). CRD filed a petition in Los Angeles County Superior Court against California Food Management LLC, which operates Burger King fast-food restaurant franchises in California and employs hundreds of individuals throughout the state. CRD alleges that the company failed to submit pay data reports for reporting years 2023, 2024, and 2025. Notably, California Food Management had previously submitted a certified pay data report for reporting year 2022, demonstrating its awareness of the reporting obligation. Despite receiving a notice of potential noncompliance in September 2025, a notice of noncompliance in January 2026, and a notice of impending court action in April 2026, CRD alleges that the company failed to respond to any of the CRD’s notices or submit the outstanding reports. CRD is seeking penalties of $100 per employee for the 2023 reporting year and $200 per employee for each of the 2024 and 2025 reporting years, along with costs and attorneys’ fees.
Coast 2 Coast Coaching, Inc. (d/b/a Elevo and Sports for Learning). CRD filed a separate petition in San Diego County Superior Court against Coast 2 Coast Coaching, Inc., an after-school sports program operator employing more than 2,100 coaches and other employees across more than forty cities in California. CRD alleges that Coast 2 Coast failed to submit pay data reports for reporting years 2024 and 2025. Like California Food Management, Coast 2 Coast had previously filed pay data reports for reporting years 2021, 2022, and 2023, confirming its awareness of the obligation. CRD sent Coast 2 Coast a notice of potential noncompliance in September 2025, a notice of noncompliance in January 2026, and a notice of impending court action in April 2026, none of which prompted a response. CRD is seeking penalties of $100 per employee for the 2024 reporting year and $200 per employee for the 2025 reporting year, along with costs and attorneys’ fees.
A Pattern of Escalating Enforcement
These two new actions follow the same enforcement playbook CRD used in its 2023 action against Cambrian Homecare, Inc. In that case, CRD sued Cambrian Homecare for failing to file pay data reports for three consecutive years. Within three weeks of being sued, Cambrian Homecare filed all of its previously unfiled reports and ultimately agreed to pay a penalty of $70,000 for failing to submit its 2022 pay data report, plus $24,778 in litigation costs to CRD. Cambrian Homecare also agreed to timely file all future reports and consented to the court retaining jurisdiction to enforce the terms of the stipulated judgment for three years.
The new petitions suggest that CRD has refined its enforcement process, which includes escalating notice letters—from a notice of potential noncompliance to a notice of noncompliance and finally a notice of impending court action—before filing suit. In a press release discussing these filings, CRD Director Kevin Kish emphasized the agency’s resolve, stating, “These companies have been repeatedly warned. Now, we’re going to court to ensure compliance with our state’s pay data reporting laws.”
Expanding Reporting Requirements
The pay data reporting landscape continues to evolve. Senate Bill (SB) 464, which took effect on January 1, 2026, now requires covered employers to collect and store demographic information gathered by an employer or labor contractor separately from employees’ personnel records. Additionally, SB 464 requires courts to impose civil penalties on noncompliant employers upon CRD’s request. Beginning January 1, 2027, SB 464 will further increase the number of job categories that covered employers must report on from the ten EEO-1 categories to twenty-three standard occupational classification (SOC) categories.
In addition, California Senate Bill 1237, presented to Governor Gavin Newsom on August 31, 2026, would significantly raise the stakes for noncompliance with these reporting obligations. Under current law, courts shall impose civil penalties of up to $100 per employee for a first failure to file the required pay data report and up to $200 per employee for subsequent failures. SB 1237 would increase the penalty for subsequent failures fivefold—to up to $1,000 per employee—effective January 1, 2027, underscoring the legislature’s intent to drive greater compliance with pay data reporting requirements.
Key Takeaways for Employers
In light of these enforcement actions and the expanding reporting requirements, employers may want to assess their current compliance with California’s pay data reporting obligations. As the Cambrian Homecare settlement demonstrated, the financial consequences of failing to file can be significant, including penalties of up to $100 per employee for a first violation and $200 per employee for subsequent violations, plus CRD’s litigation costs. CRD’s escalating enforcement efforts suggest that a failure to make these required filings could result in legal action and potential economic consequences for nonfilers.
Ogletree Deakins’ California offices, Government Contracting and Compliance Practice Group, and Workforce Analytics and Compliance Practice Group will continue to monitor developments with respect to California pay data reporting and will provide updates on the firm’s California, Government Contracting and Compliance, Pay Equity, and Workforce Analytics and Compliance blogs.
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