In 2022, Google agreed to pay $118 million to settle a class action brought under the California Equal Pay Act on behalf of roughly 15,500 women in 236 job titles. The plaintiffs alleged that women were paid thousands of dollars less per year than men doing substantially similar work, and an economist retained by the plaintiffs estimated the average annual gap at nearly $17,000. That case was litigated under a version of the law that capped how far back most workers could recover and left the definition of “wages” open to dispute.
Both of those limits changed on January 1, 2026. Senate Bill 642, which Governor Gavin Newsom signed in October 2025, amends Labor Code § 1197.5 to extend the time workers have to sue, allow recovery for up to six years of underpayment, and define wages to include nearly every form of compensation an employer provides. Each change looks modest alone. Together, they can multiply the value of an equal pay claim.
California’s Long Effort to Close the Pay Gap
California’s Equal Pay Act has been amended repeatedly over the last decade. The 2015 Fair Pay Act replaced the “equal work” standard with “substantially similar work” and eliminated the requirement that comparators work at the same establishment. Later amendments added race and ethnicity as protected categories, barred employers from relying on salary history, and, in 2022, required pay scales in job postings.
SB 642 continues that trajectory. It also replaces the phrase “opposite sex” with “another sex,” which extends the statute’s protection to nonbinary and transgender workers and broadens the pool of employees who can serve as comparators.
From Two or Three Years to Six
Under prior law, a worker had two years to bring an Equal Pay Act claim, or three years if the employer’s violation was willful. The same window generally limited how much back pay the worker could recover. Plaintiffs sometimes paired their claims with the Unfair Competition Law to reach back four years for restitution, but that remedy is narrower.
SB 642 sets a single three-year filing deadline for every claim, regardless of willfulness. The statute also specifies that a claim accrues when an unlawful pay decision or practice is adopted, when a worker becomes subject to it, or each time the worker is affected by it. In other words, every paycheck reflecting a disparity starts the clock again. Once a timely claim is filed, the worker may recover for the entire period the violation continued, up to six years.
For an employee whose gap began with a lower starting salary and carried through each raise, that can mean recovering most of the loss rather than a fraction.
Now, “Wages” Means Total Compensation
The Equal Pay Act previously prohibited unequal “wage rates” without defining the term. Employers could argue that only the base salary or hourly pay counted. SB 642 closes that argument by defining wages to include salary, overtime, bonuses, stock, stock options, profit sharing, life insurance, vacation and holiday pay, allowances, travel reimbursement, and benefits. The definition follows the federal Equal Pay Act standard, but it now appears expressly in California’s statute.
In many workplaces, and in technology and finance in particular, base salary is only part of what an employee earns. Discretionary bonuses and equity grants are often where the widest disparities appear, because they are set with less structure and less scrutiny than salary bands.
How the Changes Compound in a Damages Model
Consider a hypothetical engineer whose male colleagues doing substantially similar work earn $8,000 more in base salary, $4,000 more in annual bonus, and $15,000 more in yearly equity grants.
Under a narrow reading of the prior law, with a two-year recovery window limited to base salary, her claim would be worth $16,000 in back pay, or $32,000 with liquidated damages.
Under SB 642, her recoverable underpayment is $27,000 per year across six years, or $162,000. Because the Equal Pay Act awards an equal amount as liquidated damages, plus interest, her potential recovery exceeds $324,000 before attorney’s fees. That is more than ten times the prior figure, with no change to the underlying facts.
In a class or representative action, those figures scale across every affected worker. Including equity also introduces questions that did not arise when damages were measured in salary alone, such as whether a stock award should be valued at grant, at vesting, or at current market price, and how to account for awards that were forfeited when an employee left. For companies whose stock has appreciated, the valuation method alone can change a class-wide damages figure by millions of dollars.
Class treatment still has limits. In 2022, a California court decertified a pay equity class against Oracle covering more than 3,000 women in 125 job classifications, finding it would be unmanageable at trial. Employers will likely argue that adding bonus and equity comparisons makes classes even harder to manage. Plaintiffs will respond that compensation systems applied company-wide are well-suited to class-wide statistical analysis.
What Workers Should Do Now
Employees who suspect they are paid less than coworkers doing similar work should look beyond base salary. Bonus letters, equity grant statements, vesting schedules, and benefits summaries are all relevant under the amended law. Workers can also request the pay scale for their current position, and California law prohibits retaliation against employees who discuss or ask about pay.
Because the six-year recovery period depends on filing within three years of the most recent disparity, waiting can reduce what a worker can recover.
Talk to an Employment Attorney About a Pay Disparity
If you believe you have been paid less than a colleague of another sex, race, or ethnicity for substantially similar work, including through smaller bonuses or equity awards, you may have a claim under the California Equal Pay Act. The employment attorneys at Keller Grover represent California employees in pay discrimination matters and can help you evaluate your compensation history and your options. Contact our legal team today to schedule a consultation.