California Equal Pay Act Gets Sharper Teeth, Longer Statute of Limitations

On October 8, 2025, Governor Gavin Newsom signed Senate Bill 642, which amends California’s pay transparency law (Labor Code Section 432.3) and the California Equal Pay Act (Labor Code Section 1197.5).  The pay transparency law, originally enacted in 2023, requires employers to disclose the pay scale for open positions to counteract women being offered different pay than men for the same position.  The Equal Pay Act outlaws discrepancies in pay for members of different sexes, races, and ethnicities.  SB 642 continues the effort to reduce the gender pay gap, with the following changes that will go into effect on January 1, 2026:

• Extends the statute of limitations to file an Equal Pay Act claim from two years (or three, for a willful violation) to three years from the date of the last violation, and, significantly, allows workers to recover for a period of up to six years.
• Revises the definition of “wages” in the California Equal Pay Act to mean actual overall compensation, which is crucial when equity and other forms of non-salary compensation are major components of pay.
• Revises the definition of the “pay scale” that must be disclosed to applicants under the pay transparency law to mean what the employer expects to pay for the position “upon hire,” which closes the loophole of employers providing an unhelpfully broad range including what the employee might eventually make in the position.
• Revises existing language to be more inclusive of all genders. The Bill changes binary language in the Equal Pay Act from “the opposite sex” to “another sex.” 

The Bill strengthens protections for women in the workforce and places increased scrutiny on employers to ensure fair pay practices for all sexes across the board. The Bill was co-sponsored by the California Employment Lawyers Association (CELA), Equal Rights Advocates, and the Commission on the Status of Women and Girls.

Posted by Netra Char Bhat