California Pay Transparency Law SB 1162: Postings, Reporting, Penalties

California’s pay transparency law, SB 1162, took effect on January 1, 2023 and requires employers to publish pay ranges in job postings, share pay scale information with current employees on request, and — for larger employers — file an annual pay data report with the state. It amended Labor Code Section 432.3 and Government Code Section 12999, and the obligations kick in at two employer-size thresholds.¹

Which Employers Are Covered

SB 1162 sets two tiers. If you have 15 or more employees, you must include the pay scale in every job posting and give current employees the pay scale for their position when they ask. If you have 100 or more employees, you do all of that and also file an annual pay data report with the California Civil Rights Department (CRD).¹

The law reaches state and local government agencies and the California Legislature. For pay data reporting, the 100-employee count includes workers outside California, as long as at least one employee is physically located in the state.²

Remote Workers and Out-of-State Employers

An employee who regularly works remotely from California counts as a California employee for pay data reporting, even if all the employer’s offices sit in other states. Remote workers are reported under the establishment they’re assigned to, or under the establishment where their manager reports if they have no assignment. A fully remote company with no physical offices reports the address where the business is legally registered.²

For job postings, the obligation follows the position. An out-of-state company advertising a remote role that could be filled by someone in California should include the pay range.

Pay Scales in Job Postings

Employers with 15 or more employees must include the pay scale in every job posting — internal, external, or run through a third-party recruiter or job board. The pay scale is the salary or hourly wage range the employer reasonably expects to pay for the position, stated in good faith.¹

Good faith is the operative phrase. A posting that lists “$30,000 to $300,000” for a mid-level accounting role wouldn’t satisfy the law because the range doesn’t reflect what the employer actually intends to pay. The range should track the real budgeted compensation. If you decide to offer above the posted range, update the posting first.

The statute does not require you to disclose benefits, bonuses, commissions, or equity. It covers salary or hourly wage only. Many employers add the rest voluntarily.

Pay Scale Information for Current Employees

Any employer, regardless of size, must give a current employee the pay scale for their own position when the employee asks. It’s the same standard: the salary or hourly wage range the employer reasonably expects to pay for that role.¹

The statute doesn’t set a specific response deadline, but Labor Commissioner guidance calls for a reasonable timeframe. Employers who let requests sit for weeks invite complaints. Documenting your pay scales before anyone asks is the simplest fix.

What You Cannot Ask About Salary History

Labor Code Section 432.3 also carries a salary history ban that predates SB 1162 and still applies. You cannot ask an applicant about prior compensation or benefits, directly or through a third party. Even if you learn the number some other way, you cannot use it to decide whether to make an offer or what salary to set.¹

Narrow exception: if an applicant volunteers salary history without prompting, you may consider it. You cannot set up questions designed to elicit it. Compensation data already public under the California Public Records Act or the federal Freedom of Information Act sits outside the ban.¹

Records You Have to Keep

Employers must keep each employee’s job title and complete wage rate history for the whole time the person works there, and for three years after they leave. These records have to be available for inspection by the Labor Commissioner.¹

The consequence of falling short is not a fine. It’s a rebuttable presumption in favor of the employee. If a pay transparency complaint is filed and you cannot produce the required records, the Labor Commissioner presumes the employee’s version is correct, and you carry the burden of disproving it.¹

The Annual Pay Data Report

Private employers with 100 or more employees file a detailed pay data report with the CRD each year, covering the prior calendar year. The 2026 filing deadline is May 13, 2026.²

The report groups employees by job category, race, ethnicity, and sex. For each combination, you provide the number of employees whose annual earnings fall within each pay band used by the Bureau of Labor Statistics in its Occupational Employment Statistics survey, along with the mean and median hourly rate. Earnings come from the employee’s W-2 Box 5 (Medicare wages and tips) for the full calendar year. You pick a single pay period between October 1 and December 31 as the snapshot for headcounts, then pull W-2 earnings for everyone in that snapshot, covering the entire year even for people who didn’t work all twelve months.³

Labor Contractor Reporting

A separate report is required from employers using 100 or more workers hired through labor contractors. Same categories, same snapshot approach. Staffing positions through contractors instead of direct hires does not avoid the obligation.³

Confidentiality

CRD officers and employees cannot publicly disclose individually identifiable information from these reports before an investigation or enforcement action begins. Filing pay data does not make your compensation structure public.³

Penalties

Job Posting Violations

Failing to include the pay scale in a job posting can bring a civil penalty of $100 to $10,000 per violation. A first-time violation carries no penalty if the employer shows that all current postings have been updated to include the required range. That grace disappears after the first offense. The Labor Commissioner investigates complaints and enforces the disclosure and record-keeping provisions.¹

Pay Data Reporting Violations

If an employer fails to file the annual pay data report, the CRD can seek a court order to compel compliance. The civil penalty is $100 per employee for a first failure and $200 per employee for each subsequent failure. For a 500-employee company, that means a first violation reaching $50,000 and a repeat reaching $100,000.³

If You Think Your Employer Is Violating the Law

You can file a Pay Transparency Complaint (Form DLSE 001) with the California Labor Commissioner. You have one year from the date you learned of the violation to file. The complaint needs the employer’s name and address and a detailed account of what happened, and incomplete forms may be returned.⁴

Retaliation Is Not Allowed

Under the California Equal Pay Act (Labor Code Section 1197.5), your employer cannot prohibit you from disclosing your own wages, asking about coworkers’ wages, or encouraging others to exercise their rights, and cannot retaliate against you for doing any of those things.⁵ The National Labor Relations Act adds a federal layer: employees have the right to discuss wages with coworkers, union representatives, and the public, and employer policies that prohibit or chill those conversations are unlawful. These federal protections apply whether or not you’re represented by a union.⁶

If your employee handbook discourages wage discussions, that policy is likely unenforceable under both California and federal law.

1
California Legislative Information. California Labor Code 432.3
2
California Civil Rights Department. 2025 California Pay Data Reporting FAQ
3
California Legislative Information. California Government Code 12999
4
California Department of Industrial Relations. Instructions and Guide for Filing a Pay Transparency Complaint
5
California Department of Industrial Relations. California Equal Pay Act
6
National Labor Relations Board. Your Right to Discuss Wages