California Pay Transparency Requirements for Employers

California’s pay transparency requirements for employers sit in two statutes: Labor Code Section 432.3 and Government Code Section 12999. Together they require employers to disclose pay scales in job postings, respond to pay scale requests from employees and applicants, refrain from asking about salary history, file an annual pay data report with the state if large enough, and keep wage records for the length of employment plus three years. Which rules apply to your company depends on headcount. Penalties run from $100 to $10,000 per posting violation and up to $200 per employee for a missed pay data report.¹²

Which Rules Apply at Which Size

The obligations layer by headcount, so start by locating your company on the ladder.

Every employer in California, including state and local government agencies, must comply with the salary history ban and must provide pay scale information when a current employee asks for it.¹
Employers with 15 or more employees must include a pay scale in every job posting and must give that pay scale to any third-party recruiter posting on their behalf. The 15-employee count includes workers anywhere, not just those in California.¹
Private employers with 100 or more payroll employees must file an annual pay data report with the California Civil Rights Department (CRD). A separate report is required if the employer uses 100 or more workers through labor contractors and at least one of those workers is in California. The two groups are counted separately, not combined.²³

Recordkeeping and anti-retaliation rules apply to all employers regardless of size.

Pay Scales in Job Postings

If you have 15 or more employees, the pay scale must appear in every job posting: internal postings, external advertisements, and listings published by third-party recruiters. When a recruiter or staffing agency posts for you, you supply the pay scale and they are responsible for including it in the listing.¹

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. SB 642 added the “upon hire” language, which signals that the range should reflect what a new hire would actually receive, not a band stretching from entry level to senior tenure. If you intend to pay a single fixed hourly rate or piece rate, you can list that one figure.¹⁴

The statute defines pay scale in terms of salary or hourly wages. It does not explicitly require disclosure of bonuses, equity, health benefits, or other non-cash compensation. Posting a placeholder or absurdly wide range risks a finding that the disclosure was not made in good faith.

Remote postings are covered too. If the role can be filled by someone working in California, the pay scale must appear in the listing, even when the employer is headquartered elsewhere and advertises on a national job board.

Pay Scale Requests From Employees and Applicants

Any current employee can ask for the pay scale of the position they currently hold, and the employer must provide it. This obligation has no size threshold, so small employers are included.¹

Applicants also have a right to request pay scale information. The statute requires a response to a “reasonable request,” which the Department of Industrial Relations has generally described as a request made after the applicant completes an initial interview.⁴ No specific response-time window is set, but treat these requests as time-sensitive and keep pay scale documentation ready.

The Salary History Ban

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

Even if the applicant volunteers their prior salary, you still cannot use that information to decide whether to hire them or what to offer. And you cannot rely on a prior salary to justify a pay gap between employees doing substantially similar work, because that would separately violate California’s Equal Pay Act.⁴

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

Annual Pay Data Report to the CRD

Private employers with 100 or more payroll employees must file a pay data report each year with the California Civil Rights Department. Employers that use 100 or more labor contractor workers (with at least one in California) file a separate report for that group. The two reports cannot be combined.³

The deadline is the second Wednesday of May each year. For reporting year 2025, that date is May 13, 2026.⁵

The report breaks down your workforce by job category, race, ethnicity, and sex. For each group, it includes headcount by federal pay band based on W-2 earnings, the mean and median hourly rate, total hours worked for each employee counted in each band, and the company’s NAICS code.² Headcount is set using a snapshot pay period chosen between October 1 and December 31 of the reporting year, while earnings data covers the full calendar year. Reports are filed electronically through the CRD’s online pay data portal.⁶

Demographic information you collect for reporting purposes must be stored separately from employee personnel records.²

Wage and Job Title Records

Every California employer, regardless of size, must keep records of each employee’s job title and wage rate history for the length of employment plus three years afterward. The Labor Commissioner can inspect these records to investigate whether a pattern of pay disparities exists.¹

Falling behind on this one has real consequences. 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 rather than the employee having to prove it.¹

No Retaliation for Pay Discussions

Employers cannot retaliate against employees who discuss wages, ask about another employee’s pay, or take any 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.⁴

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

Penalties

Job Posting Violations

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

That first-violation grace period 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

If you miss the annual pay data report deadline, the CRD can seek a court order forcing compliance, and you will be on the hook for the costs of that legal 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 penalties add up quickly. If a labor contractor fails to provide you with the data you need, a court can shift an appropriate share of the penalties to that contractor.²

Private Lawsuits

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

How a Worker Files 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

Workers can skip the administrative process and file a civil lawsuit instead, or pursue both paths at the same time. Missing the one-year window closes the administrative route, though 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 Legislative Information. California Government Code GOV 12999
3
California Civil Rights Department. California Pay Data Reporting FAQ
4
California Department of Industrial Relations. California Equal Pay Act
5
California Civil Rights Department. Large Employers, Its Time to Report Your Annual Pay Data
6
California Civil Rights Department. California Pay Data Reporting Handbook