The California Equal Pay Act

We talked about the federal Equal Pay Act last week, but California’s had its own law since 1949. You’ll find it in Labor Code section 1197.5.

Importantly, since 2017, California’s law covers not just sex but race and ethnicity. So if there’s a difference in pay between employees along those lines, an employer must explain it based on seniority, merit, productivity, or another “bona fide factor other than” sex, race, or ethnicity. Prior salary alone doesn’t count. Bona fide factors include training, education, experience, or others, but they must be job-related and consistent with business necessity. Even then, the employee can still win by pointing out an alternative that would serve the same business need but with equal pay.

Also, since 2016, the law compares pay when employees perform “substantially similar work,” not just “equal” work. It used to require equal pay for work that required “equal skill, effort, and responsibility.” Now it requires equal pay for “substantially similar work, when viewed as a composite of skill, effort, and responsibility.” The idea is that you can’t avoid the law by relying on fine distinctions, or even job titles, that don’t matter to the work. It also doesn’t matter where the employees work as long as they share similar working conditions. Finally, employees can ask about the pay of other employees. Employers don’t have to tell them, but they can’t punish them for talking about it among themselves or otherwise retaliate against them for relying on the law.

Employees who sue and win can recover double the difference in pay and their legal fees.

For more information, read these FAQs from the California Department of Industrial Relations, or give us a call.