California Equal Pay Act: What It Requires and What SB 642 Changed in 2026

Consider a hypothetical example: a hiring manager preparing a job post for a California-based role reuses a salary range from an older listing because the team wants to move quickly. The range is wide enough to cover several experience levels and budget scenarios. Around the same time, an employee in a similar role starts reviewing their own pay after learning that a newer colleague may be earning more. Neither situation began with bad intent. But unclear job scopes, inconsistent pay decisions, and outdated ranges can create real concerns for both workers and employers.

That is where California's Equal Pay Act matters. It is a pay-equity law that addresses unjustified differences in compensation, while related pay-transparency rules shape what employers must communicate during hiring. In 2026, changes under SB 642 made clear, supportable pay practices even more important.

What Is the California Equal Pay Act?

The California Equal Pay Act is intended to help prevent unlawful pay disparities. It asks employers to examine whether employees who perform substantially similar work are paid differently because of sex or other protected characteristics covered by the law.

A pay comparison is not limited to two people with identical titles. Job titles vary widely across teams and companies. What matters more is the work itself: the skill, effort, responsibility, and working conditions involved. Two employees may have different titles but perform closely related work with similar levels of responsibility. If their pay differs, the employer should be able to point to a legitimate, consistently applied reason, such as experience, education, performance, or seniority. Pay decisions should rest on real job-related criteria rather than assumptions or informal habits.

The law is distinct from, but closely connected to, pay-transparency requirements. Equal pay focuses on whether compensation differences are justified. Pay transparency focuses on what compensation information an employer must disclose during hiring.

Why Titles Alone Don't Tell the Whole Story

Pay inequity is not always obvious from a payroll report. A company may have employees with the same title doing very different work, or employees with different titles performing very similar work. A meaningful review looks at actual duties, the level of responsibility and decision-making involved, required skills and credentials, how bonuses and commissions are handled, and whether managers apply consistent criteria.

Consider a hypothetical marketing team where one employee holds the title "Marketing Specialist" and another is called "Campaign Coordinator." Both independently manage campaigns, work with vendors, analyze performance data, and report to the same leader. Their titles alone would not explain a large pay gap, though a difference could be easier to support if one manages a larger portfolio or carries substantially greater responsibility. Clear job architecture, meaning well-defined roles, levels, and pay practices, helps organizations make fairer decisions and explain them when questions arise.

What Changed Under SB 642 in 2026

California's pay-equity and transparency landscape changed on January 1, 2026, when SB 642 took effect. According to an overview of 2026 pay-equity developments from Brown & Brown, SB 642 requires employers to provide realistic, good-faith pay ranges that reflect what a new hire can actually expect to receive, rather than broad or general ranges covering multiple levels or scenarios. The same overview notes that the law lengthened the time available for employees to bring Equal Pay Act claims and can allow recovery for up to six years of violations. (Brown & Brown's 2026 pay transparency and pay equity update)

That extended recovery window changes the math for employers. A pay decision made years ago, and never revisited, can still create exposure today if it was never documented or justified. This is a meaningful shift from treating pay equity as a hiring-season task to treating it as an ongoing recordkeeping responsibility. Employers that keep clear, dated documentation of why a pay decision was made, tied to job-related factors, are in a far stronger position than those relying on institutional memory or informal manager judgment.

Good-faith ranges should be usable, not theoretical

A pay range should help a candidate understand the likely compensation for the specific opening, not just some plausible band across several job levels or locations. Employers can still make distinctions based on legitimate factors, but the published range should align with the role as it is actually being hired. Before posting, hiring teams should be able to answer two or three basic questions: What level is this job, and what is the expected starting range for this specific opening? If those answers are unclear internally, the posting is likely to create confusion externally as well.

What Employees Can Do

Employees concerned about a possible pay disparity can start by gathering factual information rather than jumping to conclusions:

1. What work am I actually performing? Write down regular duties, responsibilities, and required skills.
2. Who performs substantially similar work? Focus on the substance of the job, not just the title.
3. What might explain a difference? Experience, tenure, performance, or a different scope of work may be relevant.
4. What company information is available? Review job descriptions, compensation policy, and any posted pay range.
5. Who can address the concern? That may be a manager, HR representative, or legal professional.

Keeping organized records of job responsibilities, performance feedback, and compensation communications can make a conversation with an employer more productive. A pay concern can feel personal, but a calm, specific discussion usually starts with the job itself: the work performed and the criteria used to set pay.

What Employers Should Review Now

Compliance is not a one-time posting exercise. A strong foundation starts with job descriptions that reflect reality, each with a clear purpose, core responsibilities, and expected experience. Compensation ranges should connect to those roles and levels, and any exceptions should be documented with a job-related reason.

Managers often influence starting offers, merit increases, promotions, and retention adjustments. Without guidance, two managers may make very different decisions for similar roles, so training should cover when to involve HR, which factors are appropriate in an offer decision, and why documentation matters.

A periodic compensation review can catch issues before they become disputes. Reviews may compare similarly situated employees and look for patterns in starting pay, promotions, and incentive compensation. The goal is not identical pay for everyone; it is identifying unexplained differences and confirming the company's stated practices are actually being followed. When an issue turns up, the response may involve correcting data, adjusting a range, improving approval processes, or getting advice from qualified employment counsel.

Remote and Distributed Teams Need a Consistent Process

Distributed work can make pay practices harder to manage. A California-based employee may report to a manager in another state or work alongside colleagues in multiple locations, which can fragment compensation decisions across systems and local practices. Organizations should avoid treating California hiring as an isolated recruiting task. Instead, they can use a consistent workflow that confirms the correct role and level, applies the appropriate pay range, and records the basis for any approved exception.

For global employers managing distributed teams that include California-based workers, these compliance demands add another layer of complexity on top of existing hiring and payroll processes. TCWGlobal offers expertise in navigating pay transparency, reporting, and recordkeeping obligations, helping organizations stay compliant as they scale across locations.

The Bottom Line

The California Equal Pay Act is about whether compensation practices are fair, explainable, and connected to the work employees actually perform. The 2026 changes under SB 642, including good-faith pay ranges and a longer window for claims, make that documentation more urgent than ever. Employers should revisit job postings, pay ranges, and manager decision-making processes, while employees should review available pay information and raise specific, job-focused questions when a disparity seems unexplained.

Informational note: This article is provided for general informational purposes only and is not legal advice. It does not represent the advice or opinion of the website or organization on which it appears.