California’s Pay Transparency Law, SB 1162, requires employers with 15 or more employees to include a pay range in every job posting and to share the pay scale for a role with any current employee who asks. Employers with 100 or more workers must also file an annual pay data report with the California Civil Rights Department (CRD). The law took effect January 1, 2023 and amended Labor Code Section 432.3 and Government Code Section 12999.
Which Employers Are Covered
SB 1162 sets two thresholds.1California Legislative Information. California Labor Code 432.3 If you employ 15 or more people, you must include a pay scale in every job posting and provide pay scale information to current employees on request. If you employ 100 or more, you have those same duties and must also file an annual pay data report with the CRD. The law applies to private employers, state and local government agencies, and the California Legislature.
For the 100-employee count used in pay data reporting, workers located outside California are included as long as at least one employee is physically in the state.2California Civil Rights Department. 2025 California Pay Data Reporting FAQ An employee who regularly works remotely from California counts as a California employee even if every company office sits in another state. Remote employees are reported under the establishment they’re assigned to; if they aren’t assigned to one, they fall under the establishment where their manager reports. Fully remote companies with no physical offices use their legal registration address.
The posting rule reaches further than a California headquarters. An out-of-state employer advertising a remote job that could be filled by someone physically in California should include a pay range in the posting.
Pay Scale in Job Postings
Every covered employer must include the pay scale in all job postings, including internal postings, external postings, and any put up by 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.1California Legislative Information. California Labor Code 432.3
Good faith is the operative phrase. A range of “$30,000 to $300,000” for a mid-level accounting role would not satisfy the law because it does not reflect what the employer actually intends to pay. The range should match the budgeted compensation for the role. If you decide to offer above the posted range, update the posting first.
The statute does not require posting benefits, bonuses, commissions, or equity. The pay scale covers salary or hourly wage only. Many employers add more detail voluntarily to compete for candidates.
Pay Scale for Current Employees
Any employer, regardless of size, must provide the pay scale for a current employee’s position when that employee asks for it.1California Legislative Information. California Labor Code 432.3 The pay scale provided is the salary or hourly wage range the employer reasonably expects to pay for that role.
The statute does not fix a specific response window, but Labor Commissioner guidance calls for a reasonable timeframe. Employers who routinely take weeks will draw scrutiny. Documenting your pay scales before anyone asks is the simplest way to stay compliant.
Salary History Ban
The same Labor Code section bars employers from asking applicants about prior compensation or benefits, directly or through a third party. Even if the information comes in by other means, the employer cannot use it to decide whether to hire or what salary to set.1California Legislative Information. California Labor Code 432.3
There is one narrow exception: if an applicant volunteers salary history without being prompted, the employer may consider it. The ban also does not cover compensation data that is publicly available under the California Public Records Act or the federal Freedom of Information Act.
Annual Pay Data Report
Private employers with 100 or more employees file a pay data report with the CRD each year covering the preceding calendar year. The 2026 filing deadline is May 13, 2026.2California Civil Rights Department. 2025 California Pay Data Reporting FAQ
The report groups employees by job category, race, ethnicity, and sex, and for each combination requires:
- 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.
- Mean and median hourly rate, calculated using W-2 Box 5 earnings (Medicare wages and tips) for the full calendar year.
Employers pick a single pay period between October 1 and December 31 of the reporting year as a snapshot to establish headcounts.3California Legislative Information. California Government Code 12999 W-2 earnings are then pulled for each person in that snapshot, covering the entire year even if the employee did not work all twelve months.
A separate report is required from any employer that uses 100 or more workers hired through labor contractors. The same categories and snapshot method apply, so staffing positions through contractors instead of direct hires does not avoid the obligation.
Record-Keeping
Employers must keep records of each employee’s job title and complete wage rate history for the entire time the person works there and for three years after they leave.1California Legislative Information. California Labor Code 432.3 The records must be available for inspection by the Labor Commissioner.
The consequence of poor records is built into the statute. If an employee files a pay transparency complaint and the employer cannot produce the required records, the Labor Commissioner presumes the employee’s version is correct, and the employer bears the burden of disproving it.
Penalties
Failing to include a pay scale in a job posting can result in 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.1California Legislative Information. California Labor Code 432.3 That grace period is gone after the first offense. The Labor Commissioner investigates complaints and enforces the posting, disclosure, and record-keeping provisions.
For pay data reporting, the CRD can seek a court order compelling a non-filing employer to comply. The civil penalty is $100 per employee for a first failure and $200 per employee for each subsequent failure.3California Legislative Information. California Government Code 12999 At 500 employees, a first violation could reach $50,000 and a repeat could reach $100,000.
Filing a Complaint
If you believe your employer has violated the pay transparency requirements, you can file a Pay Transparency Complaint (Form DLSE 001) with the California Labor Commissioner. The deadline is one year from the date you learned of the violation.4California Department of Industrial Relations. Instructions and Guide for Filing a Pay Transparency Complaint The complaint must include the employer’s name and address and a detailed account of what happened. Incomplete forms may be returned, so fill out every required section before submitting.
Protection From Retaliation
California’s Equal Pay Act (Labor Code Section 1197.5) protects workers who disclose their own wages, ask about coworkers’ wages, or encourage others to exercise their rights. Retaliation for any of these activities is illegal.5California Department of Industrial Relations. California Equal Pay Act Federal law adds another layer: under the National Labor Relations Act, employees have the right to discuss wages with coworkers, union representatives, and the public, whether or not they’re represented by a union.6National Labor Relations Board. Your Right to Discuss Wages A handbook policy that bars wage discussions is likely unenforceable under both.