California Pay Transparency Requirements for Employers

California pay transparency requirements for employers combine four obligations under Labor Code Section 432.3 and Government Code Section 12999: disclose a pay scale in job postings, provide pay scales on request, refrain from asking about or using salary history, and file an annual pay data report with the state. Which of these apply depends on how many people you employ. Penalties run from $100 to $10,000 per posting violation and up to $200 per employee for a missed pay data report.

Which Rules Apply at Your Headcount

The obligations layer on as you grow.

Every employer in California, including state and local government agencies, must honor the salary history ban and must provide pay scale information when a current employee asks for it.¹

At 15 or more employees, you must include a pay scale in every job posting, including postings a recruiter or staffing agency publishes on your behalf. The 15-employee count includes workers anywhere, not just in California.¹

At 100 or more payroll employees, private employers must submit an annual pay data report to the California Civil Rights Department (CRD). A separate report is required if you use 100 or more workers through labor contractors and at least one of them is in California. Payroll employees and labor contractor employees are counted separately, so the two groups are not combined to reach 100.²

The Salary History Ban

You cannot ask applicants about their prior pay, and you cannot use salary history to set their compensation. The rule applies to every employer in California regardless of size, and it covers oral and written inquiries, whether made directly or through a recruiter or background check vendor.¹

If an applicant volunteers their salary history, you still cannot use it to decide whether to hire them or what to offer. You also cannot rely on prior salary to justify a pay gap between employees doing substantially similar work, because that separately violates California’s Equal Pay Act.³

One narrow exception: salary history that is already public under federal or state law, such as compensation data for certain government officials, falls outside the ban.¹

Pay Scale in Job Postings

If you have 15 or more employees, every job posting must include the pay scale for the position. That covers internal postings, external advertisements, and listings published by third parties. When you engage a recruiter or staffing agency, you must give them the pay scale, and they are responsible for including it in the listing.¹

What Counts as a Pay Scale

As of January 1, 2026, “pay scale” is defined as a good-faith estimate of the salary or hourly wage range the employer reasonably expects to pay for the position upon hire.¹ The “upon hire” language added by SB 642 reinforces that the range should reflect what a new hire would actually receive, not an aspirational band stretching from entry level to senior tenure.

If you intend to pay a fixed hourly rate or a set piece rate rather than a range, you can list that single figure.³ The statute defines pay scale in terms of salary or hourly wages and does not explicitly require disclosure of bonuses, equity, health insurance, or other non-cash compensation. Posting overly broad or placeholder ranges risks a finding that the disclosure was not made in good faith.

Remote and Out-of-State Postings

The posting rule applies to any position that could be filled by someone working in California, including remote roles. If your company is headquartered elsewhere but the job is open to California-based applicants, the pay scale must appear in the listing. This catches many out-of-state employers off guard, especially those posting remote roles on national job boards.

Responding to Pay Scale Requests

Any current employee can request the pay scale for the position they currently hold, and you must provide it. There is no 15-employee threshold here, so even small employers are covered.¹

Applicants have the same right. The statute requires a response to a “reasonable request,” which the Department of Industrial Relations has generally interpreted to mean a request made after completing an initial interview.³ No specific response deadline is set, but treat these requests as time-sensitive. Keeping pay scale documentation ready for each role is the simplest way to stay compliant.

Annual Pay Data Report to the CRD

Private employers with 100 or more payroll employees file a pay data report each year with the CRD. If you also use 100 or more workers through labor contractors, you file a separate report for that group. The two reports are not combined.²

The filing deadline is the second Wednesday of May each year. For reporting year 2025, that falls on May 13, 2026.⁴

The report breaks down your workforce by job category, race, ethnicity, and sex, using ten federal job categories. For each grouping, you report headcount within each federal pay band based on W-2 earnings, the mean and median hourly rate, total hours worked, and your NAICS code.⁵ Headcount is set using a snapshot from a single pay period between October 1 and December 31 of the reporting year, while earnings data covers the full calendar year. Filings go through the CRD’s online pay data portal.⁶

Any demographic information you collect for the report must be stored separately from personnel records.⁵

Wage and Job Title Records

Every employer in California, regardless of size, must keep records of each employee’s job title and wage rate history for the length of employment plus three years after separation. The Labor Commissioner can inspect these records to investigate patterns of pay disparity.¹

This requirement has teeth. If you fail to maintain these records and an employee later brings a claim, the law creates a rebuttable presumption in favor of the employee. The burden shifts to you to disprove the allegation.¹

No Retaliation for Wage Discussions

You cannot retaliate against employees who discuss wages, ask about another employee’s pay, or take action to enforce their rights under the Equal Pay Act. Discipline, demotion, or termination for requesting a pay scale, filing a complaint, or encouraging coworkers to exercise their rights is prohibited.³

An affected employee can file a complaint with the Labor Commissioner within one year of the retaliatory action or bring a civil lawsuit within the same window. Retaliation complaints can result in penalties of up to $10,000 per violation payable directly to the worker.

Penalties for Noncompliance

Consequences depend on which requirement you violate.

Job Posting Violations

The Labor Commissioner can impose civil penalties between $100 and $10,000 per violation for failing to include a pay scale in a job posting. The amount depends on the circumstances, including any prior violations. For a first offense, no penalty will be assessed if you can show that all open job postings have been updated to include the required pay scale.¹

That grace period is narrow. It applies only to the posting requirement under subdivision (c), not to the salary history ban or other provisions, and the fix must be complete. Updating some postings but not all will not qualify.

Pay Data Reporting Violations

Miss the annual pay data report and the CRD can seek a court order forcing compliance, with you on the hook for the costs of that action. A court may also impose civil penalties of up to $100 per employee for a first failure to file and up to $200 per employee for each subsequent failure. For a company with several hundred employees, those per-employee amounts add up fast. If a labor contractor fails to give you the data you need to complete your report, a court can shift an appropriate share of the penalties to that contractor.⁵

Private Lawsuits

Anyone harmed by a Section 432.3 violation can bring a civil action for injunctive relief and any other remedy the court considers appropriate. This runs separately from the Labor Commissioner’s process, so an employee can choose either route or pursue both.¹

How Workers File a Complaint

A worker who believes an employer has violated the pay transparency rules can file a written complaint with the Labor Commissioner’s Office. The complaint must include the employer’s name and address and describe the violation in detail. The deadline is one year from the date the worker learned of the violation.¹

The Labor Commissioner is required to investigate promptly. A worker can also skip the administrative process and file a civil lawsuit, or pursue both at the same time. If the one-year administrative window closes, a court action may still be available depending on the circumstances.

1
California Legislative Information. California Labor Code LAB 432.3 – Contracts and Applications for Employment
2
California Civil Rights Department. California Pay Data Reporting FAQ
3
California Department of Industrial Relations. California Equal Pay Act
4
California Civil Rights Department. Large Employers, Its Time to Report Your Annual Pay Data
5
California Legislative Information. California Government Code GOV 12999
6
California Civil Rights Department. California Pay Data Reporting Handbook