Good evening, different attorney here. Since you are located in CA, your question has been transferred to the CA Employment Law section of this website.
In California it is illegal to discriminate against an employee because they are pregnant. Furthermore, something in CA called the Pregnancy Disability Leave Law (codified within the Fair Employment & Housing Act) also requires employers of 5 or more to allow women disabled from pregnancy to take up to 4 months of protected job leave.
By initial appearances, it would seem that your daughter's employer realized they would have an employee who would soon be missing a lot of work and is trying to "constructively discharge" her by changing the terms of the employment such that she is compelled to leave. This would be illegal.
But being pregnant does not make someone compltely immune to termination or a change in the conditions of their employment. If a demotion TRULY was going to happen out of financial/business necessity, the employer can still take that action even if the affected employee happens to be pregnant. Terminating (or constructively discharging) a pregnant employee is only illegal if it is happening because the employee is pregnant.
Discerning whether an employer's motivation is related to the pregnancy is a factual question, meaning ultimately it would be up to a judge or jury. But unless your daughter's employer has compelling evidence that this demotion truly was going to happen anyway (i.e. all employees with her job are being similarly demoted), it will not be hard to convince a jury that the employer's motive was unlawful. Circumstantially, the motive is clear.
Your daughter can proceed in a couple of different ways. She can reject the paycut and claim that she is essentially forced to quit (constructively discharged), then sue for pregnancy discrimination. Alternatively, she can negotiate a severance package, whereby she signs a waiver of her right to sue in exchange for severance money. Another way of looking at the latter option would essentially be an early and up front "settlement." Either way, she should immediately contact a local attorney. Any attorney should be willing to assist her on a pure contingency fee basis, meaning there is no up front fee, just a percentage of what is recovered. See here to locate an attorney who can help: https://www.cela.org/?page=4
I hope that you find this information helpful. Please do not hesitate
to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.
If you do not require any further assistance, please be so kind as to provide a positive rating of my service so that I may receive credit for assisting you. Very best wishes moving forward.