California Equal Pay Act

The pioneering California Equal Pay Act, enacted in 1949, was intended to correct the centuries-old problem of gender-based wage discrimination and “redress the segregation of women into historically undervalued occupations.” California Senate Bill No. 358 Section 1. In fact, there was a time when the prevailing attitude among some U.S. Government officials was that the Government could save money by hiring women and paying them lower wages. Source: Women in the Federal Service, U.S. Civil Service Commission, Washington, D.C., 1938. Unfortunately, the California Equal Pay Act did not achieve its goal of ridding California of gender-based wage discrimination. The California Equal Pay Act evolved over the four decades following its passage so that it was virtually identical to the federal Equal Pay Act of 1963 (29 United States Code, at section 206(d)), and the state law was rarely utilized because its statutory language, fraught with out-of-date terms and loopholes, made it difficult to establish a successful claim.

Of course, there are legitimate and lawful reasons for paying some employees more than others, yet gender-based pay discrimination, fueled by conscious or unconscious biases, continues to exist. To put this into perspective, according to #EqualPayCA, women in California lose more than $78 billion due to the wage gap each year. The California Legislature found that in 2014, a woman working full-time year-round earned an average of 84 cents to every dollar a man earned. This gap is even worse for women of color and Latina women. This gap contributes to the overall higher poverty rate for women and the even more severe poverty rate for women of color. California Senate Bill No. 358 Section 1. There is a gender wage gap in an astonishing 97% of California occupations. Based on today’s wage gap, women lose over $400,000 during the course of a 40-year career. Source: California Commission on the Status of Women and Girls.

The California Fair Pay Act, which went into effect January 1, 2016, amended the California Equal Pay Act. The purpose of the law is to help eliminate the longstanding gender wage gap and strengthen California’s commitment to achieving true gender pay equity.

To close a loophole in the law that enabled employers to avoid liability by assigning different job titles for essentially the same work, the California Fair Pay Act amended the California Equal Pay Act to require equal pay for employees of the opposite sex who perform “substantially similar work,” as opposed to the previous definition of “equal” work, on jobs requiring similar:

• Skill (e.g. the experience, ability, education, and training necessary to perform the job)
• Effort (e.g. the measure of physical or mental exertion required to perform the job), and
• Responsibility (e.g. decision-making responsibility or degree of accountability)

Performed under similar working conditions (e.g. hours, exposures to noise, dust, or fumes; air quality and ventilation; temperature, isolation from coworkers, and exposure to hazards).

The California Fair Pay Act also strengthened the California Equal Pay Act by eliminating the requirement that the wage differential must be within the “same establishment” to be unlawful, and instead prohibits an employer from paying an employee at a wage rate less than those paid to employees of the opposite sex performing substantially similar work in California’s overall workforce regardless of job title. California Labor Code § 1197.5.

For example, as amended, the California Equal Pay Act generally prohibits a company from paying a woman who works at a food packaging facility in rural western Fresno County, California less than a man who works in the same or similar position that requires the same or similar skill, effort, and responsibility performed under similar working conditions at its food packaging facility in metropolitan Los Angeles, California. This example also applies to similar facilities operated by different companies.

As a further example, hotels generally have both janitors and housekeepers. Traditionally, janitors have been men and housekeepers, women (note that in situations where only certain groups hold specific positions, this may raise issues of discrimination based on sex or race or other protected characteristics, which under the Fair Employment and Housing Act (FEHA) protect many more classes of individuals than those protected under the California Equal Pay Act). The strict placement of individuals into certain job positions based on sex is occupational segregation, which results from society’s perception that there are “men’s jobs” and “women’s jobs.” Because janitors scrub the floors in the hotel lobby and ballrooms, and housekeepers vacuum the carpets in the guestrooms, and not vice versa, employers could assert under the old law that the work of janitors and housekeepers is not “equal.” Under the new law, the reality that their work is “substantially similar” is what matters. Historically, janitors have been paid more than housekeepers, but they really should not be paid differently. Without laws such as the California Equal Pay Act, which aim to ensure that workers are paid an equal rate for substantially similar work, the only way an underpaid housekeeper could hope to achieve pay equality while remaining with the employer would be to persuade the employer to allow her to change occupations and become a janitor.

There are situations, which may not be readily apparent, where it is lawful to pay a man more than a woman. For example, a man and a woman both hold the job title of project manager at a company and they received the same job description upon being hired. In actuality, the man supervises a dozen employees at two locations and the woman supervises three employees at one location. In this example, the two jobs, despite having the same title, may not be substantially similar due to differences in responsibility.

What is important is whether the work itself is “substantially similar” rather than what your position is called. Any job description you may have received from your employer (and whether the job description is current and accurate or outdated and inaccurate) may be useful in determining whether your job is “substantially similar” to another, higher paying position in the company.

The California Equal Pay Act does contain four exemptions that an employer can use as a defense to gender pay differences: (1) a seniority system (differences in pay based on the length of service with the employer); (2) a merit system (e.g. differences in pay based on written performance evaluations); (3) a system that measures earnings by quantity or quality of production (e.g. piece rate work, automobile mechanics paid based on each repair job completed); or (4) a bona fide factor other than sex, such as education, training, or experience. California Labor Code §1197.5 (a). The broad, catchall bona fide factor can include such things as a worker being paid more because of greater specific job experience or job training, or higher cost-of-living factors for the particular geographic area in which the workplace is located. The burden is on the employer to prove one of these exceptions. While a worker must show that the employer in fact pays workers of one sex more than workers of the opposite sex for substantially similar work; if the worker makes that showing, then employer has the burden of demonstrating that one of the recognized lawful reasons for the pay difference is applicable, and, if the employer does so, the worker may then show that the employer's stated reasons are merely a pretext. Green v. Par Pools Inc. (2003) Cal.App.4th 620, 626.

In addition, the California Fair Pay Act amended the California Equal Pay Act to require an employer to maintain records of wages and wage rates for three years rather than only two years as was previously the case. This ensures a larger source of evidence from which to determine whether an employee was paid fairly.

According to the California Commission on the Status of Women and Girls, the first step to pay equity is transparency. The California Fair Pay Act also amended the California Equal Pay Act to include an anti-retaliation provision that strives for transparency by explicitly protecting employees from discrimination and retaliation (e.g. termination of employment, demotion, suspension, reduction in pay or hours) for disclosing their own wages, discussing the wages of others, or inquiring about another employee’s wages. This means that as an employee, you are protected if you decide to discuss your own wages or another employee’s wages with other employees. This helps workers to find out how much other workers are paid and to identify unfair differences in pay. Women cannot achieve wage parity in the workforce unless they have ample opportunity to discover that wage discrimination exists in their workplace. Without knowing that a wage gap exists, women would not be able to challenge wage discrimination.

To increase wage-rate transparency in the workplace, the California Fair Pay Act also amended the California Equal Pay Act to include an anti-secrecy provision, which specifically prohibits an employer forbidding an employee from aiding or encouraging any other employee to exercise his or her rights under the California Equal Pay Act.

If an employee has been discharged, discriminated, or retaliated against because she or he has engaged in any conduct allowed under the California Equal Pay Act, then she or he “may recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief.” California Labor Code § 1197.5 (k)(2).

Despite the significant progress made in California to strengthen California’s equal pay laws, including the California Equal Pay Act, the gender pay gap has persisted, resulting in billions of dollars in lost wages for women each year. To remedy this injustice, California law has continued to develop in recent years. The California Equal Pay Act has now been amended so that race and ethnicity, along with sex, are protected categories, thereby greatly expanding the number of workers protected by the law. Employers may not pay employees less than other employees of the opposite sex, another race, or another ethnicity for substantially similar work. Employers are also prohibited from using prior salary information of the employee to justify any pay difference based on sex, race, or ethnicity.

The California Equal Pay Act has been amended to cover public employees, thereby affording protection to a large additional portion of the workforce totaling more than 800,000 workers. Source: Governing calculations of U.S. Census Bureau 2014 Annual Survey of Public Employment & Payroll data.

California Labor Code § 432.3 was enacted to generally prohibit employers from seeking a job applicant’s salary history information. While an employer may not ask a job applicant what he or she made in the past, the employer can inquire as to an applicant’s wage expectations for the offered position. Job applications should not include questions concerning an applicant’s current or former salary or hourly wage rates. If a job applicant voluntarily reveals his or her salary or wage history, the employer may not rely on the job history to excuse pay rate differences between employees of the opposite sex, or different race or ethnicity, who perform substantially similar work. The reason for this provision is that nothing about prior earnings is a legitimate measure of work experience, ability, or performance. To allow employers to pay employees differently based on salary history information would perpetuate historic inequities in pay.

California Labor Code § 432.3 also requires employers to supply pay scales for the offered position upon the reasonable request of an applicant. A “reasonable request” means a request made by the job applicant after completing the initial interview with the employer. A “pay scale” is either the salary or hourly wage range or the set salary or hourly wage for the position applied for by the applicant.

The California Department of Fair Employment and Housing (DFEH) now has the authority to investigate and prosecute complaints alleging unlawful discriminatory wage rate practices based on sex, race, or ethnicity. To help facilitate the goal of equal pay, private employers with 100 or more employees must now submit a pay data report to the DFEH that contains specified wage information. This will allow the DFEH to efficiently identify wage inequities and enforce equal pay or anti-discrimination laws. California Government Code §§ 12930, 12999.

California Equal Pay Act claims must be filed with a court of law within two years of the date of the violation. If the violation is willful, the claim must be filed within three years of the event. California Labor Code § 1197.5 (i). Each paycheck the employee receives that documents unequal pay is considered a violation for the purpose of calculating the deadline for filing a lawsuit.

An employee can either file a claim for a California Equal Pay Act violation with the Labor Commissioner’s Office, Department of Industrial Relations, State of California, or file a lawsuit in court. An employee is not required by law to file a claim with the Labor Commissioner’s Office before filing a lawsuit in court.

If the employee believes he or she has a claim for discrimination (e.g. a failure to promote based on sex) in addition to claim for a California Equal Pay Act violation, because the California Department of Fair Employment and Housing (DFEH) is the state agency charged with enforcing California’s civil rights laws and protecting Californians from discrimination in employment, he or she must file a claim with the DFEH.

An employee claiming retaliation for filing a California Equal Pay Act claim has six months from the date the retaliation occurred to file a retaliation claim with the Labor Commissioner. Alternatively, an employee may file a civil action for retaliation in court within one year of the retaliation. California Labor Code § 1197.5 (k)(3). An employee does not have to file a retaliation claim with the Labor Commissioner before filing an action in court.

Are you a high performing female who believes they are being paid lower than their males peers for the same job?

Although there is a gender wage gap across most industries, there are some industries that appear to discriminate more than others. The major occupation groups with the largest gender wage gaps include manufacturing; sales; transportation; protective services; farming, fishing, and forestry; building and grounds cleaning and maintenance; legal; and management. Source: 2016 Report on Women’s Earnings in California State Civil Service Classifications. If you work in any of these occupation groups, be active and find out if you are getting paid what you deserve. The California Commission on the Status of Women and Girls has compiled many resources that are available for determining if you are being paid fairly.

If you believe you are being paid less than others because of your sex, race, or ethnicity, or you believe your employer is otherwise violating your rights under California law, contact the leading employment lawyers at Kokozian Law Firm, APC. Ask about our free initial consultation.