Signed into law on October 8, 2025, California’s SB 642 updates the state’s existing Equal Pay Act (the Act) effective, January 1, 2026. Generally, the Act imposes varying requirements on employers to share pay-scale information in job postings and with applicants as requested. Changes under SB 642 include redefining the terms “pay scale,” “sex,” “wages,” and “wage rates,” extending the statute of limitations for commencing a civil action to recover wages, and providing guidance on what constitutes a violation under the Act.  

What Does it Mean 

The Act currently defines “pay scale” as the salary or hourly wage range that the employer reasonably expects to pay for the position. SB 642 revises this definition to make clear the term means, “a good faith estimate of the expected wage range that an employer reasonably expects to pay for the position upon hire.” 

Existing law prohibits an employer from paying its employees at wage rates less than the rates paid to employees of the opposite sex or another race or ethnicity for substantially similar work, except under specified circumstances. SB 642 clarifies that employers are prohibited from paying employees at wage rates less than the rates paid to employees of “another sex” instead of the “opposite sex.” This change brings the Act into alignment with the state’s Fair Employment and Housing Act.  

The statute now also defines – for purposes of the Act only – “Wages” and “wage rates” as all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.  

The Act’s current statute of limitations to bring a civil action to recover wages is no later than 2 years after the cause of action occurs or, if the cause of action arises out of a willful violation, no later than 3 years after the cause of action occurs. SB 642 extends the limitations period to no later than 3 years after the last date the cause of action occurs and allows an employee to obtain relief for the entire period of time in which a violation exists, up to 6 years. Further revisions make clear that a cause of action occurs when: 

• an alleged unlawful compensation decision or practice is adopted; 

• an individual becomes subject to the decision or practice; or  

• an individual is affected by the application of the decision or practice.  

To prepare for the statute’s January 1, 2026 effective date, employers should consider the following: 

• Updating the company’s current pay transparency policies and processes to ensure they include the statutes updated definitions for “pay scale,” “sex,” “wages,” and “wage rates; and 

• Reviewing the company’s current record retention policies to ensure all relevant wage records are being retained to account for the Act’s updated statute of limitations period is also essential.  

• Providing updated training to human resources and management personnel regarding the new requirements.