California Equal Pay Act: What It Is and How to Use It

California Equal Pay Act: What It Is and How to Use It

The California Equal Pay Act was originally passed in 1949 to prohibit employers from paying employees less than employees of the opposite sex for equal work. In 2015, then-Governor Jerry Brown signed a new California Fair Pay Act that strengthened the act in several ways, including requiring equal pay for employees who perform “substantially similar work” when viewed as a composite of skill, effort, and responsibility, eliminating the requirement that the employees being compared work at the “same establishment.” 

This makes it more difficult for employers to justify inequities in pay through the “bona fide factor other than sex” defense, ensuring that any legitimate factors relied upon by the employer for pay inequities are applied reasonably and account for the entire pay difference. Further, retaliation against employees who seek to enforce the law is disallowed, making it illegal for employers to prohibit employees from discussing or inquiring about their coworkers’ wages, and extending the number of years that employers must maintain wage and other employment-related records from two years to three years.

There have been many additional changes to the law since then, as Governor Brown signed a bill adding race and ethnicity as protected categories effective January 1, 2017. In 2018, the Equal Pay Act began covering public employers and prohibited employers from seeking the salary history information of applicants and requiring employers to supply pay scales upon the request of applicants. 

Protections Under the Equal Pay Act

The California Equal Pay Act prohibits employers from paying certain workers less than employees of the opposite sex for substantially similar work when the work is viewed as a composite of effort, skill, and responsibility and performed under similar working conditions. While the law is gender-neutral, it was largely intended to prevent employers from paying men more than women. 

The Equal Pay Act now also protects employees of certain races and ethnicities from being paid less than coworkers for substantially similar work. All provisions apply to public and private employers.

New Protections of the Equal Pay Act

The Fair Pay Act helped close loopholes in the original act that had made it difficult for women to sue employers successfully. The Equal Pay Act now covers substantially similar work instead of equal work, making clear that the nature of the work is now more important than the job title.

Workers no longer need to compare themselves to others located in the exact same establishment. This means that a person can see if the women in a factory are making the same amount as a man in the factory across town owned by the same company.

When evaluating wage differences, employers must retain wage and wage scale records for three years. Employees also no longer have to prove that employers had discriminatory intent.

The burden is now on an employer to explain why it is paying an employee less than other employees of different sexes, races, or ethnicities.

California Labor Code § 432.3 provides leverage during salary negotiations because it prevents employers from asking about a person’s prior salary and requires employers to provide pay scales upon reasonable request.

Employer Justifications for Unequal Rates of Pay

An employer may be able to justify paying certain employees less when the wage difference is based on a merit system, a seniority system, a system measuring earnings by production quantity or quality, or some bona fide factor other than sex, race, or ethnicity. A difference must relate to a job and be consistent with a business necessity.

If a different business practice would achieve the same goal without producing a wage difference, it would not be a business necessity. A justification must be reasonable and account for the entire salary difference.