Wage gap law could be a boon for Latinas

SB 642 applies to all workers, but those facing worst inequity could gain the most.

- BY ANDREA FLORES

Pay transparency has become a hot-button issue for Californians — especially Latinas, whom a UCLA study recently identified as the lowest-paid demographic in the state.

Come 2026, a new law could make a huge difference.

On Oct. 8, Gov. Gavin Newsom signed Senate Bill 642, the "Pay Equity Enforcement Act," which strengthens the California Equal Pay Act: a law that prohibits employers from paying employees "at wage rates less than the rates paid to employees of the opposite sex or another race or ethnicity for substantially similar work."

The new Pay Equity Enforcement Act will provide more targeted approaches to reducing the wage gap in the California Equal Pay Act, effective January 2026. Some of the changes include:

■Updates to the definition of "wages" to include stocks, benefits, life insurance and other nontraditional forms of compensation;

■Requirement for employers to provide "good faith estimates" of what they reasonably expect to pay for the position upon hire;

• Revisions of outdated gender binary language, replacing “the opposite sex” with “another sex,” to make it consistent with language in the Equal Pay Act;

• Extension of the statute of limitations under the Equal Pay Act to three years, aligning the statute with other wage claims under the Labor code.

The law also allows workers to recover wages lost because of their employer's ongoing discriminatory compensation decision or practice, for up to six years. The Pay Equity Enforcement Act also made headway for another reason: Newsom signed the measure into law on Latina Equal Pay Day, a national awareness holiday that underscores the inequalities Latina women face in compensation.

The governor made note of this milestone in a press release: “Latinas are the backbone of many communities in California, driving growth in every sector from innovation to education to healthcare.”