On October 8, 2025, California adopted SB 642, which amends both California’s equal pay law and its pay transparency law. According to the legislative history, SB 642 “continues efforts to strengthen California’s Equal Pay Act by requiring more transparency in job postings and increasing remedies for violations.” SB 642 Senate Floor Analysis (Sept. 8, 2025) at 6.

The goals of the amendments include:

1. requiring more accurate salary estimates in job postings; and
2. ensuring the value of stock, bonuses and other benefits are factored into equal pay determinations.

Given the amendments take effect January 1, 2026, now is the time for California employers to consider whether they should revise job postings or record-keeping procedures, or otherwise make changes to pay practices to mitigate risk and ensure legal compliance.

Key Changes:

• “Pay scale” now means a good-faith estimate of the salary or hourly wage range the employer reasonably expects to pay when hiring for the role.
• Employers cannot pay employees of “another” sex—not just the “opposite” sex—less for “substantially similar work.” The law clarifies that “sex” is defined the same way as in the Fair Employment and Housing Act (FEHA).
• Employees have a three-year statute of limitations to file a civil action to seek back pay, and they do not need to prove that the employer’s failure to pay was “willful.”
• Employees may recover backpay for up to six years’ worth of violations.
• Clarification around when pay discrimination...

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