California’s Equal Pay Act Must Help Drive Employer Compensation Decisions

Figuring out how much to pay employees is a recurring challenge for employers as they recruit new hires and try to retain their existing employees. While employers have some discretion in making these decisions, California’s Equal Pay Act (EPA) — along with other pay equity and transparency laws — are an ever-present compliance risk for employers.

Designed to prohibit certain types of discrimination in employee compensation, the EPA gets recurring attention from the California Legislature. For example, effective January 1, 2026, Senate Bill (SB) 642 expanded employer liability and potential monetary damages for EPA violations. Also, in the past several years, the California Legislature has: