California has long been at the forefront of employee-protection laws, and compensation transparency is no exception. For decades, employers commonly tried to limit pay discussions to avoid tension among staff. But wage secrecy is largely incompatible with California’s commitment to fair pay. Even when employers acted with good intentions, these restrictions created legal risk. Today, they are not merely discouraged; they are fundamentally inconsistent with California law.
The Beginning
California’s earliest protection dates back to Labor Code section 232, enacted in 1985. That statute prohibits employers from preventing employees from disclosing their own wages or disciplining them for doing so. The law historically stopped short of shielding employees who asked about co-workers’ pay. In practice, this meant an employee could share their own salary but lacked clear protection when seeking comparative information. Many employers misunderstood these distinctions, and surveys showed a majority of employees believed wage discussions were banned or discouraged.
How California Strengthened Transparency Rights
The landscape changed dramatically with the enactment of the California Fair Pay Act, effective January 1, 2016. This law marked a significant evolution in equal pay protections and expanded employees’ rights to discuss compensation without fear of retaliation. The Fair Pay Act requires equal pay for substantially similar work and broadens the pool of appropriate comparators beyond the same location or job title. It also places the burden squarely on employers to demonstrate that any pay difference is based on a legitimate, job-related factor.
Perhaps most importantly for 2026, the Fair Pay Act explicitly prohibits employers from restricting employees from inquiring about, discussing, or disclosing their own wages or the wages of others. California employees now have the right not only to tell but also to ask. Employees may also assist co-workers in exercising these rights. Violations can result in litigation under both Labor Code section 1197.5 and related anti-retaliation provisions.
These protections apply regardless of whether an employer is unionized, public or private (except in narrow circumstances), or operates multiple locations. In California, transparency is not an organizational choice; it is a statutory mandate.
Where Federal Rules Fit—and Where They Don’t
Federal law, including the National Labor Relations Act, offers similar protections for private-sector employees. However, California employers cannot rely solely on federal standards. California’s rules apply more broadly and carry stricter enforcement mechanisms. In addition, California law covers wage discussions among employees who may not be protected under federal statutes, such as certain public-sector workers.
What California Employers Should Expect in 2026
California does not require employers to publish wages or proactively disclose salary ranges unless specific laws apply, such as the statewide pay scale transparency rule for job applicants and employees in organizations with 15 or more employees. Still, the legal trend is unmistakable: California continues to move toward expanding transparency as a tool for addressing pay inequity. Employee awareness is higher than ever. Questions about wage comparisons are on the rise. And pay equity litigation—fueled by the Fair Pay Act’s employee-friendly burden of proof—remains a significant risk.
Employers should expect continued regulatory and cultural pressure to adopt transparent practices even when not legally mandated. Sharing salary ranges, offering explanations of compensation structures, and conducting internal pay equity audits increasingly reflect best practices in California’s competitive labor market.
Compliance Steps for California Employers
California employers should begin with a comprehensive review of employee handbooks, confidentiality agreements, workplace policies, and onboarding materials to ensure no remnants of wage-secrecy rules remain. Even subtle language—such as encouraging employees to keep “merit information confidential”—may conflict with California law.
Training is equally essential. Supervisors who discourage wage discussions, even informally, may inadvertently expose the organization to claims of retaliation or interference with rights protected by the Labor Code. In California, cultural compliance is as important as written compliance.
Employers also may benefit from adopting voluntary transparency initiatives that exceed minimum requirements. Clearly explaining the factors used to determine compensation, discussing salary ranges openly, and conducting periodic pay audits can reduce the risk of misunderstandings or allegations of bias. In a state that aggressively enforces fair pay rules, proactive transparency often prevents reactive litigation.
The California Perspective Going Forward
As we move into 2026, California’s commitment to pay transparency is unmistakable. The shift away from secrecy reflects the state’s long-standing policy goal of dismantling inequitable pay structures. Employees will continue to exercise their right to discuss wages openly, and California law will continue to protect those conversations.
For employers, the choice is no longer whether to allow transparency—California law already requires it. The real decision is whether to resist the trend or embrace it as part of a modern, equitable workplace culture. Employers who choose the latter position themselves as leaders in a state where fairness, clarity, and accountability are not optional values but legal obligations.