California Pay Transparency Requirements | 2026

OVERVIEW

Effective January 1, 2023, and continuing in full force in 2026, California employers with 15 or more employees must comply with expanded pay transparency requirements under California Labor Code §432.3 (as amended by SB 1162). These obligations affect job postings, compensation disclosures, and recordkeeping practices.

WHAT THE LAW REQUIRES

Job postings (external and internal): Include a good faith pay scale — defined as the salary or hourly wage range the employer reasonably expects to pay for the position at the time of posting. Vague or artificially broad ranges present compliance and litigation risk.
Current employee requests: Employers must provide the pay scale for any position to a current employee upon request.
Recordkeeping: Maintain records of job titles, wage rates, and pay scales for each position for a minimum of three years.
Internal postings: The pay scale disclosure requirement applies equally to internal job postings — promotions and transfers are a common area of non-compliance.

IMPORTANT CLARIFICATION — SCOPE OF "PAY SCALE"

Under current California law, "pay scale" is defined as the salary or hourly wage range only. There is no current statutory requirement to include bonuses, equity, commissions, or other variable compensation in the posted range. However, enforcement agencies have increased scrutiny of overall compensation structures and voluntary disclosure of total compensation is considered a best practice — particularly for roles where variable pay is a significant component. Employers who choose to include broader compensation details should do so consistently across similarly situated roles.

ENFORCEMENT EXPOSURE

Non-compliance may result in civil penalties per violation, agency investigations by the California Civil Rights Department, and increased exposure to wage discrimination claims. Penalties have been assessed per job posting, making broad non-compliance costly.

RECOMMENDED EMPLOYER ACTIONS

Audit all external and internal job postings for compliant pay ranges

Train HR staff and hiring managers on pay scale disclosure obligations

Document compensation structures and ensure they are consistently applied

Confirm posted ranges align with actual compensation decisions made

Establish a process for responding to current employee pay scale requests

Verify three-year recordkeeping obligations are met for all positions

Applies to employers with 15+ employees operating in or recruiting into California. California Labor Code §432.3 (SB 1162, eff. Jan. 1, 2023).

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California Pay Transparency Requirements | 2026

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