With the passage of California Senate Bill 1162 (SB 1162), the Pay Transparency Act, in September of 2022, businesses that operate in or hire out of California have new requirements to meet for payroll reporting. This new law, which went into effect on January 1, 2023, sets new standards for Pay Data Reporting (PRD) to help businesses better identify existing pay disparities and prevent potential pay disparities for employees based on race, ethnicity, sex, and other protected characteristics. The Pay Transparency Act is a further evolution of California’s existing pay data reporting law—a law that is important for any business located in California or hiring out of California to understand. California business law can be complex and difficult to navigate, so we’ll break down the basics of California pay data reporting laws, including what’s changed since SB 1162 went into effect. What is CA Pay Data Reporting? In 2020, California enacted its first pay data law,