Transparency is the New Standard: Navigating California’s 2026 Pay Equity Laws

Posted on Jan 13, 2026 by Griswold LaSalle Staff

Transparency is the New Standard: Navigating California’s 2026 Pay Equity Laws

The era of “Salary: Competitive” is officially over. California has been moving toward pay transparency for years, but SB 642 tightens the rules significantly starting January 1, 2026.

For business owner, this isn’t just a formatting change for you job ads–– it’s a legal requirement to operate with “good faith” and clarity.

The “Good Faith” Estimate

Employers must now provide a “good faith estimate” of the salary or hourly wage range in all job postings.

  • The Goal: The law explicitly aims to prevent “overly broad or speculative ranges”. You cannot post a range of “$50,000 – $200,000” just to keep you options open. The range must reflect what you reasonably expect to pay.
  • Inclusivity Update: The law also updates legal language, replacing “opposite sex” with “another sex” to include gender identify and expression, ensuring protections cover all employees.

Extended Liability Period

Perhaps the more dangerous change for employers is the extension of the statute of limitations.

  • 3 Years to File: Employers now have 3 years (up from 2) from the last discriminatory pay decision to bring a claim.
  • 6 Years of Back Pay: If the discrimination is found to be “ongoing,” employees can recover back pay for up to 6 years. This dramatically increases the potential financial damage of a lawsuit.
Why This Matters for Your Brand

Compliance here is about more than avoiding lawsuits; it’s about your reputation. As we state in our core values, we exist to “change the public’s perceptions… of the legal community” and business world.

Transparent pay builds trust. It signals to candidates that you value “top tier pay and benefits” and are confident in you compensation structure.

Next Steps
  1. Review Salary Bands: Ensure you have defined, defensible salary ranges for every role.
  2. Audit Job Postings: Check all active listings to ensure they contain specific, good-faith ranges.
  3. Analyze Current Pay: Look for disparities among current employees performing similar work. With the 6-year lookback period, unresolved discrepancies are now a major liability.

Need a pay equity audit?

Griswold LaSalle can help you analyze your compensation practices to ensure fairness and compliance.