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California Pay Transparency Laws: Compliance, Risk, and Putting Policy Into Practice

California’s pay transparency law applies to private employers with at least 15 employees that advertise jobs a person could perform while living in California, either on-site or remotely. The law also applies to California employers based outside the state if the position could be filled by someone working in California.

Employers that meet the 15-employee threshold are required to include a pay scale in any job posting that is shared with the public or distributed to current employees. In a separate provision, the law requires all employers, regardless of size, to provide the pay scale for an employee’s current position if that employee submits a request.

Using a recruiter or third-party job board doesn’t change that responsibility, and the employer remains accountable for the content of each job posting.

What Pay Information is Required in a Job Posting?

If a job could be done by someone in California, the posting has to show the pay range in the main body of the listing, not hidden in a link or sent later. That range should match what the company is actually ready to offer, based on budget and the role’s responsibilities. The same rule applies to postings for current employees. Some employers use one range across several jobs for convenience, but if a hire later learns the pay is lower than advertised, the Labor Commissioner can treat it as a violation.

Handling Commission-Based and Variable Pay Roles

When a position pays primarily through commissions or piece-rate compensation, employers need to make sure the job posting includes either the expected commission range or a formula that explains how pay is calculated. Explanations of commission-based and variable pay structure need to appear in the body of the listing, not in a link, attachment, or later message. If a position is commission-based, but also offers base pay, the posting needs to include both the salary range and the variable pay structure.

Pay Details That Don’t Belong in a Posting

When preparing a job posting, employers should keep the pay scale disclosure focused solely on what the law requires. Employers that add extra compensation details beyond what is required by law run the risk of confusing applicants and opening the door to misinterpretation. The following items should be excluded from the pay scale explanation:

Tips and discretionary bonuses that vary based on performance or staffing
Stock options, equity grants, or other incentives that are not guaranteed or fixed
Non-wage benefits like health insurance, retirement plans, or paid time off
Compensation structures or policies that go beyond the expected range or formula

Third-Party Postings and Employer Risk

Some employers assume that if they hire a third-party to write a job posting, they’re off the hook for pay transparency rules, but that’s not how the law works. When an employer hires a recruiter, staffing agency, or third-party platform to advertise a job, the legal obligation to include a pay range in the posting does not change. California holds the employer, not the vendor, accountable for making sure the listing meets all pay transparency requirements.

Give Explicit Instructions

To reduce the risk of violating California’s pay transparency laws, employers should send a pay range directly to the person or team creating the job post and explain that they are required to include it in the posting. The employer’s instruction should be clear, direct, and leave no room for confusion about where the range belongs or exactly how it should appear.

Document Your Communications

The employer should also document when the pay range was sent to the third-party and who received it. Documenting when the pay range was sent and who received it gives the employer a clear point of reference if the listing is challenged.

After the listing goes live, the employer should review the post to confirm that the pay range appears in the job description and is easy to find. If the range is missing or buried, the Labor Commissioner may still penalize the employer, even if someone else handled the posting.

What Employees Can Request and How Employers Should Handle It

Sometimes current employees ask for the pay scale tied to their current role. Usually this is so they can gauge how their compensation compares to others in similar positions. California law requires employers to provide this information on request, regardless of the reason or timing.

When an employee submits a pay scale request, the employer should respond and approve the request writing. To maintain consistency and avoid accusations that they didn’t fulfill their obligations under the law, employers should document each request and exactly how it was handled. Specifically, employers should maintain detailed records that include the employee’s name, the employee’s job title, the date the request was made, and the date the employer supplied the information. While the law doesn’t explicitly require employers to confirm receipt, doing so adds a layer of protection if there’s ever a dispute. Failing to respond, or delaying the response, can lead to a complaint with the Labor Commissioner. If the agency finds the employer did not comply with the law, it can impose penalties.

Employer Recordkeeping

California law requires employers to keep a record of each employee’s job title and pay history, starting from the date of hire. If the employee is promoted, reclassified, or receives a pay adjustment, the record needs to reflect that change.

In addition to tracking pay history, employers should keep copies of job postings, pay scale disclosures, and any written responses to compensation-related requests from employees. If the Labor Commissioner follows up on a complaint, the employer may be asked to produce copies of the job posting, the pay scale that appeared in it, and the date the listing went live.

Some companies go further by saving early drafts of postings that included a pay range, internal approvals tied to compensation decisions, and communication sent to recruiters or third-party vendors. Maintaining records like these is not required, but they can help explain how the pay range was developed and confirm what appeared in the posting if the listing is reviewed.

State Pay Data Reporting Requirements

California requires employers with 100 or more employees to file an annual pay data report with the Civil Rights Department. The same filing requirement applies to businesses that contract with at least 100 workers through staffing agencies or other labor contractors. Reports are due each year by the second Wednesday in May.

Reports should include job category, compensation, and demographic data for each employee. Employers should organize the data by race, ethnicity, and sex and be sure to include:

Mean and median hourly pay
Total earnings
Total hours worked
A separate submission for labor contractor workers, if applicable

Employers submit this report through the department’s online portal. Late filings may result in a penalty of $100 per employee, and increase to $200 per employee for repeat violations.

If the company brings in 100 or more workers through an outside staffing agency, the employer is responsible for reporting pay and demographic data for those workers and listing the name of each labor contractor that supplied them.

Building Pay Ranges That Hold Up Under Scrutiny

Employers should build pay ranges using numbers that reflect what the company has actually paid or is prepared to offer for the position. If the posted range doesn’t align with real compensation, the employer could face a complaint or an inquiry from the Labor Commissioner.

Use the steps below to create a pay range the company can explain and support if a complaint is filed or the listing is reviewed:

Start with real numbers. Pull past salary data from similar roles. If the company has never hired for this position, find the closest match internally and build from there.
Set clear parameters for each end of the range. The low end might reflect someone early in their career. The high end should match what the company is willing to pay for someone with specific qualifications or experience.
Stay within the approved budget. If leadership has signed off on a compensation range, the numbers in the posting should line up with that decision.
Include the pay that applies to the listed location. If the company adjusts compensation based on geography, the posted range needs to reflect what someone in that location would actually earn.
Keep a record of how the range was set. That can include internal emails, HR approvals, or notes tied to the posting. If a complaint is filed, that history helps show the range wasn’t chosen arbitrarily.

Staying Compliant With California Pay Transparency Requirements

To reduce the risk of posting incorrect or incomplete information, some employers in California are building pay transparency review steps into their hiring process. In many cases, hiring managers are required to complete a checklist before publishing a role. Some companies also route job postings through HR or legal to confirm that the listed pay range reflects the approved budget and matches internal documentation.

Employers that are serious about compliance are also maintaining records tied to each posting. Some important records to keep include the final version of the job listing, internal approvals for the pay range, and communication with any outside vendors involved in publishing the post. When a complaint is filed or the state opens a case, those documents help show what was approved, when it was shared, and how the range was determined.

California has already expanded its pay transparency law once, and additional changes are under discussion. Employers that treat pay range compliance as an ongoing operational practice are better prepared to respond if enforcement becomes more aggressive or the law changes again.

Conn Maciel Carey Can Help

For help complying with California’s pay transparency law and avoiding penalties, contact Conn Maciel Carey’s national labor & employment practice group at (202) 715-6244 to speak with an attorney who advises employers on pay disclosure.

This article is for informational purposes only and does not constitute legal advice. While we strive to ensure accuracy, laws and regulations may change, and unintended errors may occur. This content may not address every aspect of the relevant legal requirements. For guidance on your specific situation, consult your attorney.