California's SB 642 requires salary ranges employers actually intend to pay

California's pay transparency law tightened on January 1, 2026. Employers with 15 or more employees, through a change made by SB 642, must now post narrower salary ranges in job listings—not the padded wide bands that satisfied earlier requirements. The amendment adds a requirement that ranges be a 'good faith estimate' of what the employer 'reasonably expects to pay for the position upon hire,' putting specific terms around what was previously a looser mandate.

The change marks a shift from requiring employers to post *some* salary range in 2023 to requiring ranges grounded in actual hiring intent. For HR teams and company leaders, it means reviewing job postings, documenting compensation assumptions, and aligning internal pay decisions with external disclosures. The state Labor Commissioner enforces the requirement with escalating civil penalties for violations.

What 'good faith estimate' means under the new law

Under SB 642, a pay scale now means 'a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.' The phrase 'upon hire' is the key change. It means the salary range a new employee can expect on their first day, not a theoretical upper bound reflecting years of advancement or a general category wage.

Prior law, in effect through December 31, 2025, required employers to post 'the salary or hourly wage range that the employer reasonably expects to pay for the position.' That language allowed broader interpretation. An employer could argue a wide range reflected different experience levels within the position category, or anticipated future pay growth. The amendment replaced that with language emphasizing the estimate must be based on realistic compensation at hiring time.

The law does not define outer limits for what constitutes a reasonable range. Employers retain flexibility to post ranges that account for hiring based on qualifications, experience, and legitimate factors. The word 'estimate' allows for ranges rather than fixed numbers. But 'good faith' is the guardrail—the range cannot be merely a placeholder to satisfy compliance. It must reflect what the employer genuinely intends to offer.

How the change affects job posting requirements

Employers must revise job posting templates before posting new positions. A wide range covering all possible experience levels for a general administrative role does not meet the new standard if the employer actually hires for a narrower band within that range. The posted range must narrow to reflect the specific position, candidate level, and hiring budget.

The salary range must appear in the main body of the job posting, not hidden behind a link or disclosed only to candidates who request it. The law also covers positions recruiters fill on behalf of employers—employers must provide accurate salary ranges to third-party recruitment platforms so those platforms can post compliant listings.

What employers need to document internally

The law requires a 'good faith estimate,' which implies employers should be able to explain their reasoning. Employment law counsel recommend determining and documenting salary ranges for all positions with incumbents currently working in California.

Separately, SB 642 expanded what counts as 'wages' under the Equal Pay Act to include bonuses, stock options, benefits, and insurance—not just base salary. That broader definition applies to equal pay claims under Labor Code Section 1197.5 and does not extend to the salary ranges employers must post in job listings.

Enforcement and penalties

The California Labor Commissioner has authority to order civil penalties of $100 to $10,000 per violation—meaning per job posting or per failure to provide a range to a current employee upon request. For employers with 100 or more employees, failing to file required pay data reports incurs additional penalties: $100 per employee for a first violation and $200 per employee for subsequent failures.

The state treats first violations less harshly than repeat ones. If an employer is notified of a violation and adds a salary range, the Labor Commissioner will not impose a penalty for that first violation. But if an employer fails to correct the violation after notice or repeats the error across multiple job postings, escalating penalties apply. Employers can also face civil lawsuits from applicants or employees seeking compensatory damages and attorney's fees if they fail to comply.

How hiring practices must change

Hiring teams must rethink how they approach salary negotiations. Under the old model, a job posting might list a wide range to preserve negotiating flexibility. Under the new law, that approach creates compliance risk. An employer who posts an unusually wide range for a position because it might be filled at very different levels must instead decide the actual level being hired for and post the corresponding range.

This doesn't eliminate salary negotiation or flexibility—it moves the specificity earlier into the hiring process. If a role can be filled at multiple levels (junior, mid-career, senior), the employer must post a range realistic for the level being actively hired. The range must reflect what the employer is actually authorizing the hiring manager to offer.

HR departments should audit current job postings, compare posted ranges to recent offers made for those roles, and revise postings before listing new positions. Internal job postings for promotions and transfers must also include accurate salary ranges. Training hiring managers on the new requirement is critical—the practice of casually adjusting offers far outside posted ranges now carries legal risk.

Related coverage: What California's pay transparency law requires of employers.