Compliance — California

California pay transparency compliance.

Coverage thresholds, what has to be disclosed and filed, by when, and what happens if it isn’t — for employers with people in California.

California

What California actually requires

California is the only state in the country that requires private employers to file annual pay data with a civil rights regulator. That single fact reshapes how a California compensation programme has to be built.

SB 1162 — Labor Code § 432.3

Pay scale in job postings

Employers with 15 or more employees, with at least one located in California, must state the pay scale in the posting itself.

In the posting
The Labor Commissioner’s guidance is that a link or QR code does not satisfy the requirement — the scale must appear in the posting
Definition
As amended by SB 642 effective 1 January 2026, a good faith estimate of the salary or hourly wage range the employer reasonably expects to pay upon hire
Third parties
An employer engaging a third party to post must supply the pay scale to that third party
Penalty
$100 to $10,000 per violation. No penalty for a first posting violation if the employer shows all postings have been updated
SB 1162 — Gov. Code § 12999

Annual pay data reporting

Employers with 100+ payroll employees, or 100+ labor contractor employees, file annually with the Civil Rights Department.

Two reports
A Payroll Employee Report and a Labor Contractor Employee Report — they may not be combined
Contents
By establishment, pay band, job category, race/ethnicity and sex: headcount, mean and median hourly rate, and total hours worked
Deadline
The second Wednesday in May each year
Penalty
$100 per employee for an initial failure, $200 per employee thereafter — mandatory on CRD request from 1 January 2026
In detail

The parts that catch employers out

Who has to file, and how employees are counted

The pay data reporting threshold is 100 or more payroll employees, or 100 or more labor contractor employees. The count includes employees working inside and outside California, part-time employees, and employees on paid or unpaid leave. That last point catches a lot of employers out: a company with 30 people in California and 90 elsewhere is in scope.

The posting requirement is separate and lower — 15 or more employees, with at least one currently located in California. A third obligation, disclosure of the pay scale on request, applies to all employers with no size threshold: to an applicant who has completed an interview, and to a current employee for their own position.

What changed for the 2025 reporting year

Three new data fields were first required for Reporting Year 2025: exemption status (exempt or non-exempt under the IWC wage orders and/or the FLSA), employment type (full-time, part-time, or intermittent), and total annual weeks worked, including paid time off. Pay bands are built on W-2 Box 5 earnings.

RY2025 reports were due 13 May 2026. RY2026 reports are due 12 May 2027.

The 2027 job category change — start now

SB 464 replaces the ten EEO-1 job categories with 23 SOC-based job categories, effective 1 January 2027 and first applying to the RY2026 report due May 2027.

This is the single largest piece of work on the California horizon and it is widely underestimated. Remapping an entire workforce from 10 buckets to 23 is a job architecture exercise, not a reporting exercise — and the mapping you choose determines which employees are compared against which. Employers who leave it to the quarter before filing will be making structural decisions under deadline pressure.

SB 642 — the Equal Pay Act changes nobody is talking about

Effective 1 January 2026, SB 642 also amended Labor Code § 1197.5. The statute of limitations moved to three years for all violations with a six-year recovery cap; “opposite sex” became “another sex,” extending coverage to non-binary and gender identity claims; and “wages” is now defined to include all forms of pay — salary, overtime, bonuses, stock, stock options, profit sharing, life insurance, vacation, holiday pay, allowances, accommodation, and travel reimbursement.

That last change matters more than it reads. An equity grant is now squarely inside the equal pay analysis. Most pay equity studies we see still run on base salary alone.

Recordkeeping

Job title and wage rate history must be retained for each employee for the duration of employment plus three years, open to Labor Commissioner inspection. New under SB 464 from 1 January 2026: demographic data collected for pay data reporting must be stored separately from personnel records.

Getting ready

A workable sequence

We support California employers on the compensation side of this — pay equity analysis, range architecture, and how executive pay reads inside a filing or a published range. We are not attorneys and this page is not legal advice; the filings themselves are usually handled with employment counsel.

For advisory work in the region, see our Los Angeles executive compensation page.

Common questions

California pay compliance

Does California pay data reporting include employees outside California?

For the purpose of counting to the 100-employee threshold, yes — employees inside and outside California count, as do part-time employees and those on leave. The report itself covers employees assigned to California establishments and those working remotely who report to a California establishment.

What is changing in 2027 with job categories?

SB 464 replaces the ten EEO-1 job categories with 23 SOC-based categories effective 1 January 2027, first applying to the Reporting Year 2026 report due 12 May 2027. It is a job architecture exercise rather than a reporting one, because the mapping determines which employees are compared against which. It is worth starting well before the filing quarter.

Does California pay transparency law apply to remote workers?

Generally yes, where the role could be performed in California or reports into a California supervisor, office or worksite. The specifics vary — some states test on where the work is performed, others on the reporting line, and several catch out-of-state employers recruiting locally-based remote staff. Check the coverage language above against your own arrangements rather than assuming a headquarters test.

Is this page legal advice?

No. It is a compensation practitioner's summary of published requirements, current as at July 2026, intended to help you scope the compensation work these obligations create. Pay legislation in this area has been amended frequently and several provisions carry sunset dates. Confirm current requirements with employment counsel before acting.

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Pay equity analysis and range architecture, sequenced so findings can be acted on rather than merely disclosed.

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