Equal Pay for Women in California: Understanding the Gender Pay Gap and the Fair Pay Act
Women still earn, on average, less than men. California has some of the strongest laws in the country aimed at closing the gender wage gap, including the California Fair Pay Act (SB 358).
What Is the Gender Pay Gap?
The gender pay gap refers to differences in compensation between women and men. Reports have noted that women working full-time may earn thousands less per year than men in comparable circumstances. California lawmakers have recognized that the gap extends across many occupations and can be significantly worse for women of color.
While there are competing explanations offered in studies, one key reality is that some employers still pay women less than men for performing the same or similar work.
California Fair Pay Act (SB 358): Key Protections
Signed into law in 2015 and amended multiple times since, the California Fair Pay Act strengthened worker protections by expanding how pay comparisons are made and tightening employer defenses.
Major changes under SB 358 include:
- Requiring equal pay for employees who perform “substantially similar work” based on skill, effort, and responsibility.
- Eliminating the requirement that employees being compared work at the “same establishment.”
- Requiring that any factors used to justify pay differences be applied reasonably and account for the entire pay difference.
- Making retaliation illegal and prohibiting policies that prevent employees from discussing or asking about wages.
- Extending recordkeeping requirements for wage and employment-related records (from two to three years).
What “Substantially Similar Work” Means
Under California’s pay equity framework, work can be “substantially similar” even if employees have different job titles or work at different locations. The focus is on what the job requires and the conditions in which it is performed.
“Substantially similar work” is evaluated by:
- Skill: Experience, ability, education, and training required for the role.
- Effort: Physical or mental exertion needed to perform the job.
- Responsibility: Degree of accountability and duties required.
- Working conditions: Physical surroundings and hazards (e.g., office vs. construction environment).
If an employee can show they are paid less than a comparator for substantially similar work, the burden typically shifts to the employer to justify the difference under the law.
Employer Defenses (Affirmative Defenses)
If there is a pay differential for substantially similar work, the employer generally bears the burden to show the wage gap is based on:
- A seniority system
- A merit system
- The quantity or quality of production
- A bona fide factor other than sex (such as education, training, or experience), that is job-related and consistent with business necessity
The employer must show the factor is not derived from a sex-based differential in compensation and that it serves a legitimate business necessity.
Salary History Ban in California
As of January 1, 2018, California employers are prohibited from relying on salary history when deciding whether to hire an employee or when setting compensation. This change is intended to reduce the compounding effect of prior pay disparities.
Retaliation and Pay Transparency Protections
California law prohibits retaliation against employees who assert rights under the Fair Pay Act. Employers also generally cannot prohibit employees from discussing wages or asking about pay practices.
If you are concerned about retaliation, documenting events and seeking legal advice early can be important.
How We Can Help with Equal Pay Claims
The gender pay gap is a longstanding systemic issue, but California provides strong legal tools to challenge discriminatory pay practices. If you believe you are being paid less than male coworkers for substantially similar work, you may have options under California law.
Employers are prohibited from retaliating against employees for asserting wage rights and are also prohibited from preventing employees from disclosing wages.
If you want to discuss a potential equal pay claim, contact us to review your situation and advise you on next steps.