By Ryan Danz, Founding Attorney, Employer Guidance Group PC
Disclaimer: This article is general information about California law — not legal advice, and not a substitute for having counsel review your specific policies. Reading it does not create an attorney-client relationship. Employment law changes frequently; consult a licensed California employment attorney about your situation before acting.
Fifteen employees. That is the headcount at which every job ad your company publishes in California has to carry a pay range. One hundred employees is where a second obligation starts: an annual pay data report to the state. Most small and mid-sized employers know the rule exists. Fewer know that the definition of that range got stricter on January 1, 2026, that equal pay recovery can now reach back as far as six years, or that the pay data report changes again on January 1, 2027.
Who Has to Post a Salary Range in California
The posting rule is in Labor Code § 432.3, as amended by SB 642 (Ch. 468, Stats. 2025). Its duties kick in at different sizes:
| Duty | Who it applies to | Trigger |
|---|---|---|
| Put the pay scale in every job posting | Employers with 15 or more employees | Any job posting |
| Give the pay scale to a third-party job board or recruiter, which must then publish it | Employers with 15 or more employees that post through a third party | Any third-party posting |
| Give an applicant the pay scale for the role | All employers | A reasonable request from the applicant |
| Give a current employee the pay scale for their own position | All employers | A request from the employee |
| Keep each employee's job title and wage rate history | All employers | Employment, plus three years after it ends |
The bottom rows catch owners off guard: a five-person company needn't put a range in an ad, but it must answer an employee who asks what their position pays and keep the history behind the answer.
What “Pay Scale” Means Now: The Good-Faith Estimate
A posting that reads “$40,000–$160,000” states a range. Since January 1, 2026, the question is whether it is a good faith estimate. Under SB 642, a pay scale is now a good faith estimate of the salary or hourly wage range the employer reasonably expects to pay for the position upon hire (§ 432.3(m)(1)). Base it on what you budgeted for this hire, not your full internal band, and note at the time how you set it (comp survey, incumbents, approved budget). That contemporaneous note is your evidence of good faith.
Penalties, and the First-Violation Cure
An aggrieved person can file a written complaint with the Labor Commissioner within one year of learning about the violation, or sue for injunctive relief (§ 432.3(d)(1)–(2)). The Labor Commissioner can assess $100 to $10,000 per violation, weighing the full circumstances, including any earlier violations (§ 432.3(d)(4)).
The safety valve: for a first violation of the posting and disclosure rules, no penalty is assessed if the employer shows every open-position posting now includes the pay scale. It works once, and only if every live posting is fixed.
Skip the title and wage records, and the employee's claim gets a rebuttable presumption in its favor (§ 432.3(d)(5)).
The Equal Pay Exposure Behind the Range
The range in your posting is evidence. If you advertised $70,000–$85,000 and the woman you hired is paid $72,000 while a man in the same role makes $84,000, the ad is the first exhibit in an equal pay claim.
SB 642 also changed Labor Code § 1197.5, the California Equal Pay Act:
| Issue | Rule as amended by SB 642 |
|---|---|
| Time to sue | Three years after the last date the cause of action occurs |
| How far back recovery reaches | The whole period of the violation, capped at six years |
| When a claim “occurs” | When a discriminatory pay decision is adopted, when someone becomes subject to it, or each time they are paid under it |
| What counts as “wages” | All forms of pay, including salary, overtime, bonuses, stock, benefits, and travel reimbursement |
Because a claim arises with each paycheck, a gap set at hire keeps renewing for as long as it lasts.
Pay Data Reporting: Who Files, and What Changes in 2027
The second half of SB 1162 is the annual pay data report under Government Code § 12999, filed with the Civil Rights Department.
- Who files: private employers with 100 or more employees, plus a separate report from employers with 100 or more workers hired through labor contractors. That second report must also name the labor contractors used.
- When: on or before the second Wednesday of May, covering the prior calendar year.
- What: headcounts by race, ethnicity, and sex across job categories and pay bands, plus median and mean hourly rates within each job category.
- Penalty for not filing: at CRD's request, a court shall impose up to $100 per employee for a first failure and up to $200 per employee for a later one. Part of the penalty can be shifted to a labor contractor that failed to provide its data.
SB 464 (Ch. 760, Stats. 2025) changes the report again. It already requires demographic data to be collected and stored separately from personnel records. A new version of § 12999, operative January 1, 2027, expands the job categories from 10 to 23. The 23-category format first applies to reporting year 2026 data, in the reports due May 12, 2027.
The steps below are general information, not legal advice. Have counsel tailor them to your workforce and practices before you act.
Action Checklist
- Count your headcount against the 15 and 100 thresholds before each hiring push.
- Audit every live posting, including ones on job boards and recruiter sites, for a range that is an actual good-faith estimate for this hire.
- Send the range to every third party that posts for you, in writing.
- Write down how you set each range at the time you set it.
- Name who answers applicant and employee pay-scale requests.
- Keep title and wage-rate history for every employee for the length of employment plus three years.
- Compare actual pay to the posted range for people in the same role. Fix unexplained gaps now, while each paycheck is still adding to the exposure.
- If you have 100 or more workers, confirm your pay data report vendor is ready for the 2027 format and that demographic data is stored apart from personnel files.
Our post on California personnel file and payroll records requests covers the deadlines that run alongside these rules. If a reclassification is changing someone's pay, see our post on California's exempt duties test.
Get Your Postings and Pay Practices Reviewed
Employer Guidance Group reviews job postings, pay ranges, and pay equity data for California employers before a complaint arrives. Schedule a compliance audit, learn more about our wage and hour defense practice, or contact us to talk through your situation.
Disclaimer
This article is general information about California law. It is not legal advice, and reading it does not create an attorney-client relationship. Employer Guidance Group PC is not your attorney unless and until you have signed a written engagement agreement with the firm.
California employment law changes constantly. The information here may be incomplete, out of date, unverified, or incorrect, and it does not account for your specific facts — and outcomes turn on facts. Do not act, or refrain from acting, on the basis of this article. Consult a licensed attorney about your own situation before making any employment decision.
This communication may constitute attorney advertising. Prior results do not guarantee a similar outcome.