California’s Equal Pay Act expands protections beyond federal law, covering pay disparities by sex, race, and ethnicity. Employers must justify wage differences with valid factors; employees gain retaliation safeguards, filing options, and potential damages.
By Douglas Wade, Attorney
Email | Call (800) 484-4610
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The Equal Pay Acts of California and the federal government both forbid wage discrimination. They have different requirements and scopes, though. The federal Equal Pay Act simply forbids salary differences based on sex. California’s Equal Pay Act extends further and forbids wage discrimination caused by sex, race, & ethnicity for workers performing substantially equivalent work. Employers are allowed to use seniority, merit, output quality, or other pertinent job-related considerations to support compensation disparities under both statutes.
Retaliation against workers who dispute wage inequalities is prohibited under the two Equal Pay Acts. In addition to paying back wages, additional damages, and litigation costs to impacted employees, an employer who breaches the Equal Pay Act within either statute may also face criminal penalties under California law.
The Equal Pay Act (the Federal Equal Pay Act) and the California Equal Pay Act forbid companies from giving workers lower wages than those paid to workers of the other sex. Employers are also prohibited by the California Equal Pay Act from paying workers less than workers of another ethnic group or race. Usually, these equal pay regulations only apply to workers who do substantially equivalent work (as defined by the California Equal Pay Act) or equal labor (in accordance with the Federal Equal Pay Act).
Although the California Equal Pay Act and the Federal Equal Pay Act share numerous similarities, they also differ in several significant and subtle ways. In addition to outlining these parallels and discrepancies, this page explains the way the Equal Pay Acts are implemented in California and across the nation.
Two main statutes pertaining to equal pay are:
Other laws/legislations that forbid wage discrimination are the Fair Housing & Employment Law (California anti-discrimination legislation) and the Civil Rights Act, Title VII (anti-discrimination legislation of the federal government). These two rules often forbid prejudice in the workplace, but equitable compensation is not always their main goal. This article will therefore mainly discuss the Equal Pay Acts of California and the federal government.
Every employer in California, whether public or private, is required to abide by the California Equal Pay Act. Public employers, or government employers, are exempt from the criminal culpability clause of the California Equal Pay Act. Nonetheless, the remainder of the California Equal Pay Act still applies to them.
Almost all employers are subject to the Equal Pay Act (federal). The federal regulation states that companies that (1) do not hire people involved in commerce or the handling of items that have been transported in commerce, and (2) are not involved in commerce or the manufacturing of products for commerce, are exempt from the Equal Pay Act. Small agricultural businesses and local family-owned companies are a few examples of such employers.
For independent contractors, the Equal Pay Acts offer no protection
The goal of the California Equal Pay Act and the Equal Pay Act (federal) is to safeguard employees. Independent contractors and other workers are therefore not protected by the Equal Pay Act. A worker can still be protected by the Equal Pay Act after being correctly reclassified as an employee. They need to demonstrate that they were wrongly classified.
The Equal Pay Act (federal) states that no employer may discriminate against employees based on their sex within any workplace where they work by paying them less than he compensates employees of the other sex in the same workplace for similar work on jobs that require equal competence, labor, and responsibility and that are carried out under comparable working conditions.
However, if an employer can show that the wage payments were made in accordance with (i) the seniority arrangement, (ii) a system of merit, (iii) a system that evaluates earnings by the amount or quality of output, or (iv) a disparity based on any other consideration other than that, the employer will not be held accountable for an infraction of the Equal Pay Act (federal).
Employers are not permitted to lower any employee’s pay rate in order to comply with the law if they are relying on any of these exceptions. In order to correct an infraction of the Act, the federal regulations clearly stipulate that the lower rate must be adjusted to the greater rate paid for equal labor when a violation is found (i.e., rather than reducing the greater rate).
Two main protections are found in the California Equal Pay Act. First, the main safeguard relies on race and ethnicity; second, it is based on gender. California Equal Pay Act forbids disproportionate compensation based on race and ethnicity as well as sex. The federal Equal Pay Act simply forbids unequal compensation depending on sex.
Employers are prohibited by the Equal Pay Act (California) from paying any of their workers less than workers of the other sex for work that is substantially identical when measured as a combination of skill, diligence, and accountability, and carried out in comparable working conditions. Below are definitions and explanations of some of the key terms used in this statute.
According to the California Equal Pay Act, an employer is also prohibited from paying any of its workers less than workers of a different race or ethnicity for labor that is significantly similar, measured as a composite of competence, labor, and accountability, and completed under comparable working conditions. Below are definitions and explanations of some of the important terminology used in this statute.
However, if an employer can show that (1) the wage disparity is based on a seniority framework, a system of merit, an arrangement that gauges earnings by quality or quantity of output, and/or an appropriate variable other than gender (or race and ethnicity), such as training, education, or experience, (2) every consideration is relied upon fairly, and (3) the one or more variables relied upon contribute to the whole wage difference, the employer will not be held accountable for an infraction of the California Equal Pay Act.
In order to ascertain whether a company has paid workers differentially, the Equal Pay Acts of California and the federal government examine wage rates rather than total earnings. It’s a vital distinction. To avoid accountability under the Equal Pay Act, a business can pay a female worker more in commissions & bonuses than a male employee, thus justifying the wage disparity/difference. Likewise, if a woman worked twice as many hours to make up the gap, an employer that pays her $10 an hour while paying a man $20 an hour continues to be in violation of the Equal Pay Act.
As per the federal laws, the phrase “wage rate” encompasses all types of compensation, regardless of whether they are determined on a commission, piece, time, profit-sharing, bonus, or any other basis. In addition to overtime compensation, the rate at which a draw, guarantee, or advance is paid towards a commission-based settlement is also included in the phrase.
The California Equal Pay Act uses wage rates to assess whether pay is equitable (just like the Equal Pay Act of the federal government). The phrase “wage rate” is not defined under the California Equal Pay Act.
The following are examples of wages covered by the Equal Pay Acts of California and the federal government:
Furthermore, pursuant to the Equal Pay Act, stock options can also qualify as wages.
Equal Work
According to the Equal Pay Act (federal), equal work under comparable working conditions cannot be paid at varying rates based on a worker’s sex. Work requiring equal competence, labor, and accountability is referred to as equal work. According to the federal standards, “equivalent work” is defined by the job’s actual requirements rather than the job title.
The Ninth Circuit states that employment must be “substantially equivalent” rather than identical in order to qualify as “equal work.” In order to achieve this, the plaintiff must prove that (1) the positions under comparison have a basic set of duties and (2) any extra duties that are part of one job but absent from the other position do not significantly alter the two jobs.
Similar Working Conditions
According to federal rules, the jobs must be conducted under comparable working conditions for the equal compensation standard to be applicable. The phrase “similar working circumstances” refers to (1) Environments that an employee frequently encounters (like their work frequency & intensity), and (2) Hazards. It includes the physical risks that an employee encounters.
Please remember that a salary disparity would not be justified by minor/negligible variations in working circumstances that are typically ignored by employers. The Equal Pay Act (federal) mandates that an employee’s equal job must be performed at the same location and under comparable working conditions. This is an important consideration.
The criterion is whether the task is “essentially equivalent” and carried out under “similar working conditions” as defined by the California Equal Pay Act.
Substantially Similar Work
First, if the abilities, effort, and accountability needed to accomplish the job are largely the same, then the work is substantially similar. In comparison to the Equal Pay Act (federal), this norm is far more expansive and adaptable. This benchmark can be further deconstructed by contrasting the requirements of the work in terms of:
The question that arises when evaluating skills is what is required to do the job. Neither the federal nor California Equal Pay Acts allow for the justification of unequal compensation if a particular job does not require a particular set of abilities, efforts, or responsibilities. For instance, if an advanced education is not necessary to execute the work, it makes no difference if the higher-paid person has one.
Similar Working Conditions
Second, when the physical surroundings—temperature, fumes, air circulation, and any risks—are identical, work is done under similar conditions. Unlike the federal Equal Pay Act, the California Equal Pay Act allows an employee to file a claim even if there is a salary difference between workers who are employed in separate locations. Employees will find it simpler to prove pay discrimination as a result.
1. Compensation Differences Allowed by the Equal Pay Act (Federal)
There are four ways for companies to avoid being held liable for wage discrimination under the Equal Pay Act (federal). Because the federal exclusions are so much more expansive than the California Equal Pay Act exceptions, firms can more readily qualify for them. Only when a company can prove that the salary gap is founded on the following factors does the Equal Pay Act (federal) allow them to pay varied wage rates.
The Ninth Circuit stressed that employers must prove that job-related variables, not sex, are the source of wage discrepancies, and that the fourth exception—”any other reason other than sex”—should only apply to job-related reasons.
2. Allowable Wage Variations under the Equal Pay Act of California
Employers are allowed to pay various wage rates under the California Equal Pay Act, but only if they can show that the salary discrepancy is based on:
As will be further stated later, this factor is limited.
Only in the following situations can an employer legitimately use a criterion other than sex, ethnic background, or race as the foundation for a wage differential:
Employers in California are not permitted to use a worker’s prior compensation as an excuse for a pay discrepancy. However, if any resultant compensation discrepancy is supported by any or all of the expressly allowed reasons, the employer may decide to base the wage determination on the employee’s present salary.
Last but not least, if an employer uses any of the acceptable reasons listed above, it must demonstrate that it applied them sensibly and that it fully explained the discrepancy.
Instead of considering the intention of the employer, equal pay rules evaluate pay discrimination caused by the presence of salary discrepancies. Put otherwise, a worker does not have to provide evidence that their sex, color, or ethnicity caused them to get a lower salary. It is not necessary to have discriminatory intent to prove a violation. If there is a salary difference between two employees who meet the aforementioned criteria, it is sufficient.
Furthermore, companies are required by the California Equal Pay Act to preserve and file for a minimum of three years every worker’s employment conditions, including salary, rates of pay, and job classifications.
The FLSA was amended by the Equal Pay Act (federal). Employers are prohibited by the FLSA’s anti-retaliation clause from terminating/dismissing, or treating any employee unfairly, because the worker has lodged a complaint or initiated a procedure under or connected to the FLSA. According to the Ninth Circuit, this clause encompasses complaints directed towards employers as well as those that are formally submitted to a government body or lodged in court. Furthermore, according to the Department of Labor, anyone who submits a petition for equal pay or helps someone else submit one is shielded from illegal employer retaliation.
Employees are guaranteed the freedom to discuss and reveal salary information without worrying about employer reprisals thanks to the California Equal Pay Act. Employees who bring an equal pay claim, make a report relating to an equal pay violation, or take any other action relating to the implementation of the Equal Pay Act (California) should not be dismissed, discriminated against, or otherwise subjected to retaliation by their employers.
Moreover, employers are also not allowed to stop workers speaking about their own or their colleagues’ compensation, asking their colleagues about their compensation, or helping them exercise their rights under the Equal Pay Act (California). Employers are not required by these standards to tell workers their earnings, though.
The Equal Pay Act (federal) wasn’t created to specifically protect job applicants/seekers. However, job candidates are protected in a few significant areas according to the California Equal Pay Act, even though employees enjoy the majority of these rights. All candidates for employment who do not currently work for the company in any capacity are covered by these rights.
These regulations are applicable to all businesses, including private as well as public ones, just like the ones covered in earlier sections. In particular, an employer:
However, an employer might:
For disputes concerning federal law, an employee may submit an administrative claim to the Equal Employment Opportunity Commission in accordance with the Equal Pay Act (federal). After that, the EEOC would look into the claim and perhaps bring legal action on the worker’s behalf. The EEOC can oversee the payment of unpaid wages and interest if an administrative case is successful.
Except when the EEOC subsequently drops the action it started, filing a complaint with the EEOC prohibits the individual worker from continuing an independent lawsuit on their own behalf. An employee may choose to sue the company privately in court rather than through the EEOC. Before bringing an individual lawsuit against the company in a tribunal of competent jurisdiction, employees are not required by the Equal Pay Act (federal) to try all administrative remedies.
An employee impacted by a retaliation action or an equal wage violation may potentially decide to file a private lawsuit or an administrative complaint pursuant to the California Equal Pay Act. The Division of Labor Standards Enforcement is the state’s administrative agency responsible for looking into and prosecuting claims on behalf of employees according to the California Equal Pay Act. Without using up all administrative options, a disgruntled worker may also bring a private civil lawsuit.
An employee who agrees to administrative action, however, forfeits the right to file a private lawsuit unless the DLSE rejects the claim made by the worker without prejudice. If, after 180 days of the employee filing the complaint, the DLSE fails to settle the employee’s claim, the worker can intervene in the DLSE-brought action or may start an independent action.
The statute of limitations is the amount of time after the infringement that an employee, or “claimant,” has to make a claim for equal wages or retaliation.
Whether or not the employer’s breach was willful determines how long the filing deadline for federal equal wages complaints is. Within two years, a claimant has to bring a civil lawsuit in a court with the necessary authority. Irrespective of whether they sought any administrative grievance processing, an applicant has three years from the date of the claimed Equal Pay Act (federal) breach if the infringement was willful.
Whether the company’s infringement was deliberate also affects how long the time restriction is for California wage discrimination claims. For intentional violations, the claim filing period is three years; for non-willful infractions, it’s two years. The time limit starts on the day of the alleged infraction. It may be an infraction for each paycheck that shows unequal pay. Every such paycheck’s date marks the start of the clock. According to the California Equal Pay Act, an employee has one year from the beginning of the retaliatory conduct to submit a claim for retaliation.
In accordance with the Equal Pay Act (federal), an employee is entitled to:
An employee may receive “such equitable or legal redress as may be warranted” according to the Equal Pay Act (federal) if they are fired or subjected to other forms of retaliation for attempting to uphold the equal pay standards. This includes:
An employee may get the following compensation according to the Equal Pay Act (California):
Under either federal or state law (whichever yields the larger recovery sum), but not both, a worker has a right to this recovery even if they agreed to labor for the lower wage level at issue.
Willfully breaking the Equal Pay Act (California) can result in a criminal conviction for a company (or individual) alongside the civil penalties and other liabilities mentioned above. The criminal sanctions under the Equal Pay Act (California) do not apply to public employers.
Participating in discriminatory wage practices or lowering the compensation of a higher-paid worker in order to meet equal pay criteria are two examples of violations. An employer (or individual) who knowingly breaches the California Equal Pay Act faces a criminal fine of as much as $10000 and, in the case of repeated violations, a maximum jail sentence of six months if found guilty.
One or more workers file class-action suits for the benefit of a broader group of workers under comparable circumstances. When many workers wish to file comparable allegations against their employer, a class-action suit is usually used. This kind of case eliminates the possibility of inconsistent judgments in distinct lawsuits and the difficulty of bringing all individual employees together in a single lawsuit. A class-action lawsuit can be started by a single employee acting as the representative of the group.
A class-action lawsuit may be launched in state or federal court, depending on the circumstances. The class leader’s duty is to act in the greatest interests of each of the harmed workers who were impacted by the employer’s breach of the California or federal Equal Pay Acts.
Affected employees may bring civil claims for compensation against their company or employers under the federal Equal Pay Act and the California Equal Pay Act. Affected workers may decide to bring these civil claims as a class action on behalf of additional similarly situated workers or on their own behalf.
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