California's New Pay Transparency Rules (SB 642): What Employers Must Know in 2026
If your business posts job openings that someone in California could fill, California's pay transparency rules likely apply to you — and as of January 1, 2026, those rules got stricter.
California has required employers with 15 or more employees to include a pay scale in job postings since 2023. A newer amendment, Senate Bill 642, took effect on January 1, 2026 and sharpened what that obligation actually means. For business owners who hire in California — or who post remote roles a Californian could fill — this is worth a careful look.
What SB 642 Changed
The core update is about honesty in the range you post. Under the amendment, "pay scale" is defined as a good-faith estimate of the salary or hourly wage the employer reasonably expects to pay for the position at the time of hire. In plain terms: the days of posting an enormous, meaningless range (say, "$40,000–$300,000") to preserve negotiating room are over. The range has to reflect what you genuinely expect to pay.
The amendment also extended the window for employees and applicants to bring claims for willful violations. That longer exposure period means a posting mistake made today can surface much later — so getting it right now matters more than ever.
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Book a Free Consultation →Who This Applies To
The requirement reaches employers with 15 or more employees. Critically, it isn't limited to companies headquartered in California. If you post a remote position that a California resident could perform, California's rules can apply regardless of where your business sits — a trap that catches many out-of-state employers. For a business operating across Arizona, California, and Texas, that means your California business attorney services need to meet the California standard.
What Employers Should Do
- Post real ranges. Use the good-faith range you actually expect to pay, not a placeholder.
- Review your posting templates. Build the pay scale field into your standard job-posting process so it isn't forgotten.
- Mind remote roles. If a remote listing could be filled from California, treat it as covered.
- Keep records. California requires employers to maintain job title and wage history records; make sure your recordkeeping supports that.
- Train whoever posts jobs. The person writing the ad needs to know the rule.
Why It's Worth Getting Right
Beyond avoiding penalties, transparent pay practices tend to attract more and better candidates — and they reduce the risk of pay-equity disputes down the road. The compliance step is small; the downside of ignoring it is not. A quick review of your hiring and posting process now can save a real headache later.
Frequently Asked Questions
It can. If you post a remote position that a California resident could fill, California's pay scale requirement may apply even if your business is headquartered elsewhere. The safest approach is to treat any posting reachable by California applicants as covered.
California's pay scale disclosure requirement applies to employers with 15 or more employees.
It's the salary or hourly wage range the employer genuinely expects to pay for the role at the time of hire — not an artificially wide range posted to preserve negotiating flexibility.