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 SB 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to provide “good faith estimates” of what they reasonably expect to pay for the position upon hire;Revisions of outdated gender binary language, replacing “the opposite sex” with “another sex,” to make it consistent with language in the Equal Pay Act;Extension of the statute of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 health care.”
However, earnings for Latinas — who make up 20% of the population in the state — remain glaringly low when compared with their white male counterparts.
According to a recent data analysis by UCLA’s Latino Policy and Politics Institute (LPPI), Latinas in California face the nation’s widest wage gap, making 49 cents for every dollar earned by their white male counterparts.
Nationally, Latinas have the lowest median hourly wage of any racial or ethnic group at $17, compared with $25 for all men. Over the course of a lifetime, this adds up to a more than $1 million wage loss between white men and Latinas.
Robust updates to the California Equal Pay Act have not occurred since 2015, when the Fair Pay Act was passed under Gov. Jerry Brown. The Fair Pay Act ensured that employees who perform “substantially similar” work receive equal pay, even under different job titles. The 2015 law also protected employees who inquired or discussed co-workers’ wages without fear or retaliation from employers.
State Sen. Monique Limón (D-Santa Barbara), who wrote the newly passed bill, hopes the updated language surrounding wages, salary ranges and extended wage payback can provide equity for all employees.
“When you are part of a group that has the most inequitable pay, a law that allows you to create a process and timeline for equity helps you,” said Limón in a phone call with The Times.
The legislator has worked on pay equity in the state legislature for close to a decade, successfully passing bills like SB 1162 in 2022, for example, that required employers to disclose job pay scales.
“The Pay Equity Enforcement Act helps everybody because it is ensuring that you are paid equitably based on your experience,” Limón said.
Maria Morales, statewide policy director for HOPE (Hispanas Organized for Political Equality), considers the update a win for pay transparency — particularly for Latinas who are first-generation professionals and might face challenges asking employers for a raise or negotiating a salary.
“Some employers were using extremely broad salary ranges when posting how much people were getting paid for a position,” said Morales in an audio call. “It [made it] really difficult for workers to assess fairness.”
HOPE is set on building economic and political parity for Latinas and women overall through policy, advocacy and leadership development. The nonprofit helped co-sponsor SB 642 alongside the California Employment Lawyers Assn., as well as the California Commission on the Status of Women and Girls.
“Oftentimes when we’re talking about the Latina wage gap, [we think there are] cultural issues that impact Latinas, [that they] aren’t taught to negotiate for themselves,” Morales said. “They’re often first-generation professionals and they’re navigating these spaces for the first time.”
Earlier this week, HOPE released its own economic status report, which found that the number of Latinas obtaining advanced, professional degrees increased by 127% within the last two decades.
Despite these educational achievements, they did not guarantee access to well-paying jobs during tight labor market conditions, the report noted. For Latinas with professional titles such as doctor, lawyer, pharmacist or PhD, whose potential salaries are higher than the average person, the study estimates that the lifetime cost of the wage gap amounts to nearly $2.5 million.
“Modern compensation practices like stocks, bonuses and benefits were often excluded from pay reports,” Morales said. “We don’t think of compensation as including those things, [and] it’s really masking true disparities because some of these workers don’t even realize that they’re getting underpaid until they talk to their counterparts.”
Morales said the issue, at its core, remains systemic. Educational barriers, like the cost of college and limited aid to undocumented students, can make it difficult for many Latinas to earn more money. “[There are] things like occupational segregation, where Latinas are concentrated in undervalued and low-wage industries,” said Morales.
“You can look at the lack of family support systems like paid family leave or the fact that many Latina mothers are the sole breadwinners [of the family] so that impacts their ability to advance professionally.”
The goal is that the new Pay Equity Enforcement Act will help provide long-term economic gains for the Latina community, who according to the HOPE report, contributed $1.3 trillion in GDP in 2021 alone. “That’s part of why we’re really excited about this bill,” Morales said.