If your company had 100 or more employees last year, California wants a pay data report by the second Wednesday of May. That much is widely known. What's less known — and what matters most to PEOs, staffing firms, and their clients — is that the statute creates a second, separate report for workers supplied through labor contractors, with a duty on the contractor to hand over the data.
Everything quoted below is from the current text of Government Code section 12999 (edition updated January 1, 2026).
The two reports
Report one — your own employees. A private employer with "100 or more employees shall submit a pay data report to the department covering the prior calendar year," due "on or before the second Wednesday of May" each year.
Report two — labor-contractor workers. A private employer with "100 or more employees hired through labor contractors within the prior calendar year shall submit a separate pay data report to the department covering the employees hired through labor contractors." The employer must also "disclose on the pay data report the ownership names of all labor contractors used to supply employees."
And the statute closes the data loop with one short sentence that assigns the operational burden: "A labor contractor shall supply all necessary pay data to the private employer."
The definition is broad: a labor contractor is "an individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer's usual course of business." Staffing agencies are squarely inside it. Whether a PEO co-employment arrangement is treated the same way for this report is a question the Civil Rights Department has addressed in guidance rather than the statute — check the agency's current FAQ for your structure — but either way, a PEO whose clients cross the 100-worker threshold should expect to be the party producing the data, because the client won't have it.
What goes in the report
The statute specifies the contents:
Employee counts "by race, ethnicity, and sex" in each of ten listed job categories, from "executive or senior level officials and managers" down through "service workers"
Counts by race, ethnicity, and sex within each of the federal BLS pay bands
"Within each job category, for each combination of race, ethnicity, and sex, the median and mean hourly rate"
Total hours worked per employee counted in each band, and the employer's NAICS code
The mechanics matter for payroll teams: the headcount comes from a "snapshot" — a single pay period of the employer's choice between October 1 and December 31 — while the earnings figures use full-year W-2 earnings for everyone in that snapshot, "regardless of whether or not an employee worked for the full calendar year." Multi-establishment employers file "a report covering each establishment."
One privacy rule is easy to miss: demographic information gathered for this report "shall be collected and stored separately from employees' personnel records."
The penalties
Non-filing has a price the statute states exactly: on the department's request, a court "shall impose a civil penalty not to exceed one hundred dollars ($100) per employee" for a failure to file, "and not to exceed two hundred dollars ($200) per employee" for a subsequent failure. On a 500-employee population, that is up to $50,000 for the first miss — and note the word shall.
[VERIFY BEFORE PUBLISH] The reported category expansion
Coverage of the 2025 legislative session reports that California enacted a substantial expansion of the race/ethnicity categories employers must use in pay data reporting — commonly described as moving to 23 enumerated groups. That change does not appear in the January 1, 2026 code text we read, which means it either takes effect for a later reporting year or is codified outside the section we reviewed. We flag it rather than assert it: if you build demographic collection forms this year, build them so categories can be added without restructuring, and confirm the operative reporting year against the chaptered bill or the CRD's portal instructions before relying on either version. (This section is a placeholder pending a read of the chaptered bill — see the verification list.)
What a PEO should operationalize
Identify every client relationship that crosses 100 workers — the labor-contractor report belongs to the client, but the data obligation lands on the supplier.
Collect demographic data at onboarding, stored apart from personnel files, per the statute's separation rule.
Pick the snapshot period deliberately. The statute lets the employer choose any pay period in Q4; choose one that represents the workforce fairly and document the choice.
Calendar the second Wednesday of May with the data pull scheduled weeks earlier — full-year W-2 earnings plus hours per employee is not a same-week export for most systems.
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