California employers are already familiar with pay transparency laws, but SB 642 adds new requirements businesses should not overlook.

Effective January 1, 2026, the law expands pay transparency rules and increases the importance of accurate, consistent compensation practices.

One major change impacts job postings.

If your business has 15 or more employees, job listings must now include a realistic “good faith” salary or hourly wage range you actually expect to offer upon hire. In other words, broad or overly flexible ranges that do not reflect a real starting point may create problems.

SB 642 also expands what may be considered “wages” in an equal pay claim.

This means employers should look beyond base salary alone. Bonuses, incentives, stock options, benefits, reimbursements, and other forms of compensation may all factor into whether employees are being compensated fairly for substantially similar work.

The law also broadens gender protections under California’s Equal Pay Act, reinforcing the need for employers to evaluate compensation practices across their workforce carefully and consistently.

Another important update: employees now have a longer period of time to bring pay-related claims, increasing potential exposure for businesses that have inconsistent or poorly documented compensation practices.

For employers, this is not just about updating job postings. It is about taking a closer look at how compensation decisions are made and documented overall.

A few good questions to ask include:

• Are our salary ranges realistic and consistent?
• Are compensation decisions documented clearly?
• Have we reviewed bonuses and incentives for possible equity concerns?
• Are recruiters or third parties posting compliant job listings on our behalf?

Most compliance problems do not happen because employers intentionally do something wrong. More often, businesses are simply trying to keep up with how quickly employment laws continue to change.

You do not need a perfect HR system overnight, but you do need thoughtful practices, clear communication, and documentation that supports your decisions.

If you are unsure whether your hiring or compensation practices align with SB 642, now is a good time to take a closer look. Reach out to our office today to schedule a consultation.

Are your job postings and compensation practices aligned with SB 642?

Taking a closer look now may help prevent unnecessary exposure later on.
Contact Chase Law Group

WWW.CHASELAWMB.COM
310-545-7700

_{Please note that this article is for informational purposes only and should not be considered legal advice and does constitute an attorney-client relationship. It is recommended to consult with an attorney directly for specific guidance pertaining to your business and its practices.}