Employment

SB 642: What Changed in California Equal Pay Law on January 1, 2026

On January 1, 2026, Senate Bill 642 rewrote the rules for equal pay claims in California. Workers now have three years to file for any violation, can recover up to six years of underpaid wages, and can count bonuses, stock, and stock options as part of the pay being compared. If you suspected a pay gap in the past but thought too much time had passed, that may no longer be true. Wilshire Law Firm’s employment attorneys explain every change below — and what each one means for your case.

SB 642: What Changed in California Equal Pay Law on January 1, 2026
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Three years from the last date the cause of action occurs, for every violation — the willful/non-willful distinction is gone. Just as important, § 1197.5(i)(3) provides that a cause of action occurs when a pay decision is adopted, when you become subject to it, and each time you are paid wages resulting from it. In practice, every underpaid paycheck starts a fresh three-year window, and § 1197.5(i)(4) expressly preserves the continuing violation doctrine and the discovery rule on top of that. Our guide to every equal pay deadline maps how the clocks interact.

Under § 1197.5(i)(2), an employee is entitled to relief for the entire period the violation existed, capped at six years. Combined with paycheck accrual, that means a claim filed within three years of your last underpaid check can reach back up to six years of wage differential — then the Equal Pay Act doubles it: you recover the underpayment plus an equal amount as liquidated damages, along with interest and attorney's fees. Before SB 642, recovery was effectively limited to two or three years. The same gap is now worth roughly double — the full arithmetic is in our guide to what an equal pay claim is worth.

Because in many industries — especially tech — the real pay gap isn't in base salary. Section 1197.5(l)(3) now defines wages to include "all forms of pay," expressly naming bonuses, stock, stock options, profit sharing and bonus plans, and benefits. An employer that pays two engineers the same salary but grants one materially larger equity for substantially similar work has an Equal Pay Act problem. Our guide to tech pay discrimination covers equity-gap claims in depth.

Before 2026, § 1197.5(a) compared wages between employees of the "opposite sex" — binary language that left nonbinary employees in a legal gray area. SB 642 replaced it with "another sex." A nonbinary employee paid less than a colleague of any other sex for substantially similar work now has a textual claim, and comparisons no longer have to run male-versus-female. FEHA's separate protections for gender identity and expression still apply alongside — our employment discrimination attorneys routinely pair the two claims.

Frequently, yes, as to ongoing underpayment. Because each paycheck that reflects the unlawful decision gives rise to a new cause of action, a gap that began years ago but continued into the limitations period can still be actionable, with recovery reaching back up to six years. How the amendments apply to any specific timeline is fact-dependent — this is exactly the question to put to a lawyer in a free case review rather than guess at.

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Wage & Hour

$6.8M

San Bernardino County wage and hour class action settlement: a class of employees alleged their employer failed to pay wages owed and sought related penalties.

Wage & Hour

$5.5M

Oakland wage and hour class action settlement: senior living facility employees alleged unpaid wages, meal and rest break violations and unreimbursed expenses in class and representative claims.

Wage & Hour

$4.0M

Hawthorne wage and hour class action settlement: a manufacturer's hourly employees alleged missed rest breaks, short or late meal periods and unpaid wages, plus unreimbursed work expenses.

Wage & Hour

$3.9M

Newport Beach wage and hour class action settlement: hourly manufacturing plant employees alleged late and interrupted meal and rest breaks and sought unpaid premium pay.

Wage & Hour

$3.5M

Camarillo wage and hour class action settlement: hourly employees alleged meal and rest period violations and sought unpaid wages plus the related premiums.

Wage & Hour

$3.5M

Alameda County wage and hour class action settlement: hourly workers at a security systems company alleged unpaid wages and meal and rest period violations, and sought break premiums.

Wage & Hour

$3.3M

Irvine wage and hour class action settlement: hourly employees of a products company alleged they were denied compliant meal and rest breaks and sought premium pay and expense reimbursement.

Wage & Hour

$3.1M

Torrance wage and hour class action settlement: retail store employees alleged unpaid wages and meal and rest period violations, seeking final pay, waiting-time penalties and expense reimbursement.

Wage & Hour

$3.0M

Thousand Oaks wage and hour class action settlement: a manufacturer's employees alleged unpaid pre-shift work and noncompliant meal and rest breaks, seeking break premiums and expense reimbursement.

Wage & Hour

$3.0M

Orange County wage and hour class action settlement: a healthcare employer's hourly workers alleged unpaid overtime and meal and rest break violations and sought premium pay and expense reimbursement.

Wage & Hour

$3.0M

San Diego wage and hour class action settlement: hourly employees alleged unpaid wages and break violations, pursuing meal and rest period premiums and repayment of work costs.

Wage & Hour

$2.8M

Riverside County wage and hour class action settlement: a restaurant franchise's hourly workers alleged unpaid wages and meal and rest period violations and sought to recover their work expenses.

Wage & Hour

$2.8M

Brentwood wage and hour class action settlement: an education provider's hourly staff alleged unpaid wages and meal and rest period violations and sought premium pay and expense reimbursement.

Wage & Hour

$2.5M

San Francisco County wage and hour class action settlement: hourly campus employees sought unpaid wages and work expense reimbursement, alleging meal and rest period violations.

Wage & Hour

$2.5M

San Jose wage and hour class action settlement: hourly car dealership employees alleged they were underpaid, denied proper meal and rest periods and not reimbursed for work expenses.

Wage & Hour

$2.5M

San Francisco County wage and hour class action settlement: hourly clinic staff alleged off-the-clock work, meal and rest period violations, unpaid premiums and unreimbursed work expenses.

Wage & Hour

$2.5M

San Leandro wage and hour class action settlement: hourly employees alleged unpaid overtime, unpaid wages and meal and rest period violations, and claimed break premiums and out-of-pocket costs.

Wage & Hour

$2.4M

Orange County wage and hour class action settlement: restaurant employees alleged a franchise operator failed to provide legally required meal and rest breaks or pay the premiums owed.

Wage & Hour

$2.2M

Los Angeles wage and hour class action settlement: hourly hospital employees alleged their employer failed to provide meal periods required by California law.

Wage & Hour

$2.1M

San Diego County wage and hour class action settlement: franchise restaurant workers alleged unpaid off-the-clock work, late meal and rest breaks without premium pay, and unreimbursed work gear.

Wrongful Termination

$2.0M

Alameda County wrongful termination settlement: an employee who reported a coworker's harassment and helped a colleague file a complaint alleged being fired months later. The employer cited a layoff.

Wage & Hour

$2.0M

Tulare wage and hour class action settlement: food processing employees alleged interrupted rest breaks without premium pay and no reimbursement for personal phones used for work.

Wage & Hour

$2.0M

Watsonville wage and hour class action settlement: hourly workers at an agricultural company alleged unpaid overtime, interrupted lunches and missing rest breaks during long shifts.

Wage & Hour

$1.6M

Barstow wage and hour class action settlement: hourly workers at a vehicle-services business alleged unpaid off-the-clock time, meal and rest break violations and unreimbursed uniform costs.

Workplace Retaliation

$1.0M

Los Angeles County workplace retaliation settlement: an employee alleged being fired weeks after reporting harassment and wage violations. The employer said the position was eliminated.

Wage & Hour

$910K

Gardena wage and hour class action settlement: hourly employees alleged they were denied meal and rest breaks without premium pay and had to cover supplies and phone costs.

Leave of Absence

$825K

Oakland leave of absence settlement: a worker who had come back from approved medical leave was later fired and alleged retaliation and wrongful termination by the employer.

Workplace Harassment

$750K

Woodland workplace harassment settlement: a worker alleged sexual harassment and discrimination, and that supervisors took no action on repeated complaints before the worker was forced to quit.

Leave of Absence

$750K

Los Angeles leave of absence settlement: an employee let go while on approved medical leave alleged disability discrimination and wrongful termination. The employer cited restructuring.

Workplace Retaliation

$500K

Santa Ana workplace retaliation settlement: an employee alleged being let go after reporting inappropriate conduct by a manager. The company called it a layoff.

Workplace Retaliation

$500K

Fresno workplace retaliation settlement: an employee alleged being fired after an ethics complaint about patient privacy violations. The claims included discrimination and wrongful termination.

Leave of Absence

$500K

Commerce leave of absence settlement: an employee on approved medical leave alleged being fired weeks before a scheduled return, with no prior warnings. The claims included disability discrimination.

Disability Discrimination

$500K

Morgan Hill disability discrimination settlement: an employee alleged being let go during medical treatment after a request for remote work was refused. The employer cited hardship.

Disability Discrimination

$500K

Los Angeles County disability discrimination settlement: an employee alleged being fired for requesting more medical leave while coworkers were already covering the work. The employer cited hardship.

Disability Discrimination

$425K

Anaheim disability discrimination settlement: an employee facing medical treatment alleged being fired in retaliation within two weeks of complaining about a manager, despite no write-ups.

Disability Discrimination

$395K

Riverside disability discrimination settlement: an employee alleged being fired after asking to extend medical leave. The employer said the leave was exhausted.

Wrongful Termination

$340K

Santa Clara County wrongful termination settlement: an employee alleged being fired after complaining to human resources about a manager. The employer raised performance concerns after the complaint.

Workplace Discrimination

$260K

California workplace discrimination settlement: an employee alleged the employer denied reasonable accommodations and then ended the job, bringing discrimination and wrongful termination claims.

Leave of Absence

$250K

Bakersfield leave of absence settlement: an employee on doctor-ordered medical leave alleged being fired during the leave. The termination letter gave no reason.

Wrongful Termination

$225K

Campbell wrongful termination settlement: an employee who sought a medical accommodation alleged being fired in retaliation days after human resources closed a harassment complaint.

Wage & Hour

$220K

Signal Hill wage and hour class action settlement: employees alleged they missed meal and rest breaks without receiving premium pay and were not paid for all time worked.

Wage & Hour

$200K

Hemet wage and hour class action settlement: hourly thrift store employees alleged meal and rest period violations, seeking premium pay, cell phone expense reimbursement and PAGA penalties.

Wage & Hour

$185K

Shasta County wage and hour settlement: an employee brought a representative claim on behalf of healthcare employees, alleging meal and rest period violations, unpaid wages and unreimbursed expenses.

Wrongful Termination

$176K

Newport Beach wrongful termination settlement: a restaurant employee alleged being fired after reporting a coworker's sexual harassment. The employer claimed a layoff but brought that coworker back.

Disability Discrimination

$175K

San Francisco disability discrimination settlement: an employee with disabling medical conditions alleged being denied accommodations and wrongfully terminated from a salaried position while disabled.

Disability Discrimination

$174K

Tulare County disability discrimination settlement: an employee on medical leave alleged being fired while still disabled and awaiting further treatment. The employer cited a single write-up.

Wrongful Termination

$170K

Torrance wrongful termination settlement: a care facility employee alleged being fired the same day the employee reported medication handling concerns and racial mistreatment to corporate.

Leave of Absence

$125K

Downey leave of absence settlement: an employee alleged being fired while on medical leave after a warning that filing for protected leave would lead to termination.

Disability Discrimination

$125K

Sacramento County disability discrimination settlement: an employee on intermittent medical leave alleged being fired because of a medical condition and age. The claims also included retaliation.

Wage & Hour

$116K

San Diego wage and hour settlement: a restaurant employee alleged unpaid overtime from edited time sheets and straight-time pay for extra hours, plus missed meal and rest breaks.

Wage & Hour

$100K

Victorville wage and hour class action settlement: hourly restaurant employees alleged their employer left wages unpaid, violated meal and rest period rules and did not reimburse work expenses.

*Past results do not guarantee similar outcomes. Each case is unique and evaluated on its own facts.

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What Did SB 642 Change in the California Equal Pay Act?

Five things, all effective January 1, 2026. (1) The deadline to file is now three years for all violations under Labor Code § 1197.5(i)(1) — the old two-year rule, with three only for willful violations, is gone. (2) You can recover wages for the entire period a violation existed, up to six years (§ 1197.5(i)(2)). (3) A cause of action now accrues each time a paycheck reflects the unlawful decision (§ 1197.5(i)(3)) — California's version of the federal Lilly Ledbetter rule, written directly into the statute. (4) The law now prohibits paying you less than employees of "another sex," not the "opposite sex," extending protection to nonbinary and transgender workers. (5) "Wages" now expressly includes all forms of pay — salary, overtime, bonuses, stock, stock options, profit sharing, and benefits (§ 1197.5(l)(3)).

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Equal Pay FAQs

Our Most Frequently Asked Questions

We've answered the most common ones below. If yours isn't here, call us — we're available 24/7.

Maybe not. If the underpayment continued into the last three years, each of those paychecks created a fresh claim, and recovery can reach back as far as six years from filing. Timing questions like this are exactly what a free case review resolves.

It doesn't revive claims that were already dead and gone, but because every underpaid paycheck creates a new violation, ongoing gaps that straddle January 1, 2026 are generally analyzed under the new, longer windows. An attorney can map your specific dates.

Yes. The amended statute expressly includes stock and stock options in the definition of wages, so equity grants and refreshes are part of the pay being compared.

Yes — the posted pay scale must now be a good-faith estimate of what the employer expects to pay upon hire under Labor Code § 432.3, aimed at meaninglessly wide ranges. The equal pay comparison rules above are separate but often work together with posting violations.

Labor Code § 1197.5, as amended effective January 1, 2026 — the state's official text is at leginfo.legislature.ca.gov, and the Labor Commissioner's updated summary is on the DIR website. We quote the operative subdivisions throughout this page.

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