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The 2025 California legislative session is officially over and, as usual, there are new obligations employers must get ready for in 2026. Two new laws signed by Governor Gavin Newsom, which go into effect on January 1, 2026, both strengthen and expand upon existing employer obligations that govern mass layoffs and equal pay.
Senate Bill 617:Changes to Notices Under the California WARN Act
California's existing Worker Adjustment and Retraining Notification Act (Cal-WARN Act) applies to employers in California that operate any industrial or commercial facility that employs, or has employed within the preceding 12 months, 75 or more persons. Current law requires these employers provide at least 60 days' notice before a mass layoff, closure or relocation of greater than 100 miles to the affected employees, any applicable labor union, the California Employment Development Department, the local workforce investment board and certain local elected officials. These notices must include such information as the dates, job titles and number of affected employees.
The bill amends the Cal-WARN Act to require employers to include additional information in the 60-day notice:
- Information about whether the employer plans to provide any rapid response services, such as unemployment or career services designed to mitigate the disruption of job loss, through the local workforce developmentboard or elsewhere, or if the employer does not plan to provide such services at all, and certain information about CalFresh, the state's food assistance program; and
- Contact information for both the employer and the local workforce development board.
Requiring information about post-termination services (or lack thereof) in the WARN notice means that employers are not only responsible for informing employees about the upcoming layoff, but also must consider what sorts of post-employment assistance, if any, will be available to employees. Employers should be mindful that WARN Act notices are generally publicly available.
Senate Bill 642: Updates to California's Pay Transparency and Equal Pay Laws
Changes to Laws Regarding Pay Transparency
Existing California law requires employers share the pay scale for a position (1) to an applicant applying for employment, (2) to an employee for their current position and (3) for employers with 15 or more employees, in a job posting for any position. Existing California law defines "pay scale" as the salary or hourly wage range that the employer reasonably expects to pay for the position.
Senate Bill 642 changes the definition of "pay scale" in a job posting to mean "a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire." (Emphasis added.) This amendment makes clear that the pay scale provided must be the pay that the employer expects to be pay an employee upon hire, as opposed what an employer might expect to pay an employee in the same role at some point in the future. This will likely shrink the ranges of salaries and wages that will be included in job postings.
Changes to the California Equal Pay Act
California's existing Equal Pay Act prohibits an employer from paying its employees at wage rates less than the rates paid to employees of the opposite sex or another race or ethnicity for substantially similar work. An employer who violates California's Equal Pay Act is liable to the affected employee in the amount of the wages the employee lost by reason of the violation, interest on those wages and an additional equal amount as liquidated damages.
The bill clarifies that a cause of action occurs when:
- An alleged unlawful compensation decision or other practice is adopted;
- An individual becomes subject to an alleged unlawful compensation decision or other practice; or
- An individual is affected by application of an alleged unlawful compensation decision or other practice, including each time wages, benefits or other compensation is paid, resulting in whole or in part from the decision or other practice.
The bill also addresses the lack of definitions for "wages" and "wage rates" in the existing law by adding a broad definition for both terms. The bill defines "wages" and "wage rates" broadly to cover all forms of pay, including salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses and benefits. However, this expansive definition of "wages" is limited to claims brought under the Equal Pay Act and does not apply more broadly to the Labor Code as a whole.
The bill also changes the phrase "opposite sex" to "another sex," which means that the equal pay act now explicitly applies to nonbinary genders, and explicitly applies the definition of "sex" from the Fair Employment and Housing Act, which includes gender identity, gender expression, pregnancy, breastfeeding, lactation and related medical conditions, and which may open the door to claims of unequal pay on those bases. This means that employees with different gender identities or expressions must be equally compensated with those of other genders when performing substantially similar work.
Finally, the bill extends the statute of limitations on an Equal Pay Act lawsuit from two years to three years from the last act of discrimination, bringing it in line with other anti-discrimination laws in California. It also clarifies that a worker is entitled to obtain relief for the entire period in which the violation exists, up to a maximum of six years.
Thus, between the extended statute of limitations, the six-year relief period and the expanded definition of "gender," employees will have more opportunities to seek damages for unequal pay.
What This Means for Employers
Between these two bills, employers have increased obligations that run the gamut from hiring, firing and everything in between. Employers should ensure that they are prepared for these new requirements for any job postings, mass layoffs or closures that are expected to occur in the new year. Additionally, employers should regularly audit compensation decisions to ensure they are made fairly and equitably, with articulable and legitimate business reasons to justify any disparity in compensation.
About Duane Morris
Duane Morris attorneys will present more on this and the other new California employment laws during the upcoming California Employment and Immigration Law Webinar on November 13, 2025.
For More Information
If you have any questions about this Alert, please contact Brooke B. Tabshouri, Rocio Hernandez, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
