On December 4, the New York City Council voted to override Mayor Eric Adams’ vetoes of two bills requiring annual pay reporting and pay analyses. These bills—requiring private employers to report pay data by race and gender and mandating a city-led pay equity study—are emblematic of a nationwide trend toward greater scrutiny of compensation practices.

As we dive into the new year, here’s what employers need to know about the new NYC reporting requirements, recent changes to pay data reporting requirements in California, Illinois and Massachusetts, and the upcoming EU Pay Transparency Directive.

While pay reporting laws focus on accountability and seek to enable regulatory oversight and systemic analysis of pay equity across organizations, pay transparency regulations emphasize visibility, aiming to enable applicants and employees to make informed decisions and reduce information asymmetry. A round-up of recent pay transparency developments is included.

New NYC Pay Data Reporting Requirements

New law (Int 0982-A) requires employers with 200 or more employees inclusive of full-time, part-time and temporary employees) in the city to file annual reports detailing employee race or ethnicity and gender information across certain job categories and different pay ranges. Although the pay-reporting requirements take effect immediately, employers are not required to submit information until the city creates a process for doing so, which we may not see until as late as 2028.

• Reporting Details: The new reporting requirements are similar to requirements imposed by the Equal Employment Opportunity Commission (and similar to reporting requirements in California and Illinois). In 2017 and 2018, the EEOC previously called for employers to submit employees’ W-2 income information broken down by gender, race/ethnicity and job category (i.e., component 2 EEO-1 data), though the rules were rescinded during the first Trump administration. The new law requires the city agency overseeing this new initiative to include this component 2 EEO-1 data in the reporting requirements, but may also request additional data, such as information about employee gender identity or other demographics. Employers will not need to provide an employee’s personal information as part of the reports, but they will have the option to submit written remarks to provide explanations or context for the data in their submission. Additionally, employers may furnish data anonymously, but will required to submit a signed statement confirming that they provided accurate pay data.

• Timing: Now that the law has been enacted, the mayor has up to one year to select a city agency to lead the pay equity initiative. That agency will then have up to one year to create the system to collect employers’ pay data. Once that process is finalized, employers have one year to provide the required information, which must be submitted annually thereafter.
• Citywide Pay Equity Study: Under a companion measure (Int 0984-A), once employers begin submitting the pay data reports, the city agency designated to review the data, in conjunction with the commission on gender equity, will have up to one year, and then annually thereafter, to conduct a pay equity study to evaluate whether there are disparities in compensation among employees based on gender and race or ethnicity and, if there are, to identify industries where disparities may be prevalent and any trends in occupational segregation based on gender and race or ethnicity. The agency then has six months to prepare a report to the mayor and the City Council that includes recommendations regarding employer action plans for addressing any disparities identified through the study. Data contained in the reports will be published in the aggregate without revealing the information of any covered employer or employee.
• Noncompliance: For the first offense of failing to provide the city with required information, employers will be fined $1,000 unless they provide the report within 30 days of the city’s formal request. Subsequent violations will result in fines of $5,000 each. Noncompliant employers may also be listed on a city website identifying companies not in compliance.

New State Pay Data Reporting Developments

• California’s Strengthened Pay Data Reporting Law

Under California’s existing pay data reporting rules, private employers with 100 or more employees, as well as those with 100 or more workers hired through labor contractors, are required to comply with annual pay data reporting requirements administered by the California Civil Rights Department (CRD).

Senate Bill 464 amends Section 12999 of the California Code containing California’s pay data reporting requirements for payroll employers and labor contractors, enhancing the law in three material ways:

1. Separate demographic data from personnel files | Beginning January 1, 2026, covered employers must ensure that any demographic information gathered by employers or labor contractors for California pay reporting are collected and stored separately from employees’ personnel records.
2. Expanded categories | Beginning January 1, 2027, employers will be required to classify all employees in one of twenty-three SOC job categories, and EEO-1 categories will no longer be used.
3. Mandatory penalties | The prior pay reporting requirements under Section 12999 stated that a court “may impose” a civil penalty of $100 per employee for the first infraction and $200 per employee for the second and subsequent infractions related to failures to file reports. Senate Bill 464 makes the imposition of these civil penalties mandatory when CRD makes this request to a court.

• Illinois Introduces Additional Data Requirements for Equal Pay Compliance

In 2021, Illinois amended its Equal Pay Act of 2003, requiring employers with 100 or more employees to submit demographic and wage data to the Illinois Department of Labor (IDOL) to obtain an Equal Pay Registration Certificate (EPRC). Employers must count employees physically working in Illinois, as well as fully remote employees who report to management in Illinois, to determine if they must file the EPRC application.

For the 2025 submission cycle, the IDOL has made a few changes to the data template and submission process. The data template has been updated to include information about whether an employee is paid on an hourly or salaried basis and whether an employee is covered by a collective bargaining agreement.

• Massachusetts’ New Pay Data Reporting Rule Operative This Year

As of February 1, 2025, private employers with 100 or more employees whose primary place of work is in Massachusetts are required to submit an annual workforce demographic and wage data report to the Commonwealth. Covered employers can fulfill this requirement by submitting a completed federal EEO-1 Employer Report with the state secretary. The secretary of labor and workforce development will publish “aggregate wage and workforce data” on its website by July of each year.

New State Pay Transparency Laws

The regulatory push for pay transparency is not new and it continues to grow. Here’s a round-up of 2025’s state legislative pay transparency developments:

• California | SB 642 clarifies and strengthens CA’s wage transparency law. Beginning January 1, 2026, employers will have to be more specific about the pay ranges they provide in job postings. “Pay Scale” is now defined as a “good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.” SB 642 also extends the statute of limitations for workers to bring a civil action to recover wages when they are paid less than the rates paid to employees of another sex or race/ethnicity for substantially similar to three years. (NB: SB 642 also broadens the definition of “wages” and “wage rates” for purposes of the California Equal Pay Act (not the job posting requirement) claims to cover all forms of pay. That includes, but is not limited to: salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.)
• Delaware | Governor Matt Meyer signed into law legislation that will require employers with more than 25 employees in Delaware to include wage or salary ranges and information on benefits offered in job postings, beginning September 2027. Employers must also retain records of job descriptions and wage rates for at least three years.
• Illinois | Effective January 1, 2025, employers 15 or more employees must include pay scale and benefits in all job postings. The Illinois Equal Pay Act also requires employers to preserve records of the pay scale and benefits information for each posted position for at least five years.
• Massachusetts | Pursuant to the “Act Relative to Salary Range Transparency,” beginning October 29, 2025, employers with 25 or more employees must disclose pay ranges in job postings and provide ranges to employees upon request.
• Minnesota | Beginning January 1, 2025, employers with 30 or more employees must disclose in each posting for each job opening the starting salary range, and a general description of all of the benefits and other compensation, including but not limited to any health or retirement benefits, to be offered to a hired job applicant.
• New Jersey | Effective June 1, 2025, the NJ Pay Transparency Law requires employers with 10 or more employees to include hourly wage or salary range and other compensation benefits in postings for new jobs or transfer opportunities.
• Vermont | Pursuant to Vermont’s Act Relating to Disclosure of Compensation in Job Advertisements, effective July 1, 2025, employers with 5 or more employees must include fixed compensation or range of compensation in written job postings.

The 2025 developments add to a growing list of states with pay transparency requirements, including: California (for more on California’s existing regulations, see our blog here), Colorado (more here), Connecticut, Hawaii, Illinois (more here), Maryland, Nevada, New York (more here), Rhode Island, Washington (more here) and Washington DC (more here).

Obligations Outside the US for Multinational Employers

As usual, multinationals must be aware of similar laws OUS as they manage a global workforce. The latest “hot topic” is how the European Union’s Pay Transparency Directive will be implemented by EU Member States. With a June 2026 deadline looming, companies are scrambling to prepare in a bit of an uncertain environment as local legislation will be coming out in the months ahead.

Key points for global employment counsel to know now include:

• Discussions with works councils can be challenging as a careful balance needs to be struck between open and constructive dialogue while ensuring the employer remains in the driving seat on compliance strategies. Stay close to your WC.
• A range of approaches are being considered for equal value comparisons. Some organizations plan to use their existing job architecture, while others intend to expand existing bands to create a hierarchy supported by objective criteria instead of traditional job titles; others do not have any existing job architecture and are establishing one or creating new job titles using the Directive as a guide. Bottom line – it’s time to have a plan and start testing.
• Obtaining accurate pay data can be complex, especially when considering various forms of remuneration such as benefits in kind. There can also be difficulties in accessing precise data for contingent workers with assessment often being handled by external statisticians. Again – get on it.

We have developed a number of practical tools to support our clients’ preparation and compliance with the EU PTD, including things like detailed country-by-country implementation matrixes (available and updated as national legislation is published); working sessions with our team to review existing job architecture methodology to satisfy the EU PTD’s requirements for assessment of equal value; and our proprietary Equal Value Assessment (EVA) solution that leverages our experience and know-how in conducting equal pay assessments together with our market-leading data analytics team to comply with the EU PTD’s reporting requirements.

5 Key Takeaways

Enhanced pay transparency and comprehensive pay data reporting obligations expose employers to greater scrutiny through government audits, investigations, single-plaintiff and class-action litigation, steep civil penalties, and significant reputational risks.

For US and US-based multinationals, here are five recommended actions to mitigate risk:

1. Implement a centralized, scalable reporting framework. Develop a robust global pay-data infrastructure—supported by HRIS and analytical tools—for in-house legal counsel to manage diverse pay-reporting requirements across jurisdictions with the help of global employment law counsel. Centralizing reporting helps track varying thresholds, deadlines and standards, enabling timely rolling submissions and reducing compliance risk.
2. Conduct regular proactive pay audits. Under legal privilege to the extent possible, regularly review compensation structures to identify disparities by race and gender. Ensure audits meet local legal standards (e.g., in the EU, consider our EVA tool to comply with the EU PTD requirements) and partner with counsel to undertake remedial actions.
3. Understand the impact of equity awards. Collaborate closely with Compensation counsel to address how equity awards and other forms of variable remuneration are handled under laws like the EU Pay Transparency Directive.
4. Implement standardized pay transparency policies. Develop consistent guidelines that outline how salary ranges, pay bands, and bonus criteria are communicated to employees. Adapt these policies to comply with local laws while maintaining consistency across regions.
5. Train HR and management teams on legal obligations. Provide targeted training on pay equity laws, reporting requirements, and disclosure obligations. Ensure managers understand how to respond to employee inquiries and avoid inadvertent non-compliance.

For support managing your pay equity-related obligations across the US – and the globe – please contact your Baker McKenzie employment lawyer.