Compensation Protections Across All Pay Types

Effective January 1, 2026, Senate Bill (SB) 642 expands California's equal pay and pay-scale disclosure laws, strengthening pay-equity protections and transparency requirements.

California's Equal Pay Act prohibits paying employees less for substantially similar work based on sex, race, or ethnicity. The state's complementing Pay Transparency Law, effective 2023, requires employers with 15 or more on payroll to include pay ranges in job postings and bars the use of salary history in setting pay.

SB 642 revises both laws to increase compliance and enforcement requirements:

For all employers:

• Wages now include all forms of compensation, such as salary, overtime, bonuses, stock options, benefits, allowances, insurance, and expense reimbursements;
• Previously limited to two years (three if willful), recovery now extends to maximum six years compensation, with each unequal paycheck restarting the three-year statute of limitations filing period; and
• The term "sex" now covers all genders, including nonbinary and gender-nonconforming employees.

For employers with 15 or more on payroll:

• Pay scale must reflect a good-faith range the employer reasonably expects to pay at hire; and
• Employers must include that pay scale in job postings and provide it to employees upon request.

Take-Aways:

Employers should ● confirm job posting pay ranges reflect actual hiring practices; ● regularly audit total compensation (including bonuses and benefits) for consistency and equity; ● train managers and hiring teams on the updated definitions and the salary-history ban; and ● continue to keep job title and wage-rate records for the duration of employment plus three years.

For further assistance, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin

See also:

• Equal Pay Reporting - Substantial Penalties for Ignoring the May 14, 2025 Deadline(April 17, 2025)
• Employer's Mandatory Show & Tell: New State Guidance on Pay Rate Transparency (January 13, 2023)
• For the Record: Sound Management Practices for Personnel Documentation (August 14, 2020)

Cindy Bamforth
November 7, 2025