California Equal Pay Act: Pay Equity Protections for Sex, Race, and Ethnicity
Pay disparities cause working women in California to lose over $33 billion each year.1 The gap is often worse for women of color. In 2015, Governor Brown noted that “many women still earn less money than men doing the same or similar work.”2
California has strengthened the California Equal Pay Act to help ensure workers are paid based on their work—not their sex, race, or ethnicity. Under the statute, “equal work” means substantially similar work in skill, effort, and responsibility, performed under similar working conditions—even if job titles differ.3
What the California Equal Pay Act Prohibits
As amended, the California Equal Pay Act prohibits an employer from paying an employee wage rates that are less than what the employer pays employees of the opposite sex, or of another race, or of another ethnicity for substantially similar work, assessed by skill, effort, and responsibility, and performed under similar working conditions.3
What “Substantially Similar Work” Means
“Substantially similar work” focuses on what the work requires—rather than job titles. Two employees can have different titles and still perform substantially similar work if the roles are mostly similar in:
- Skill (experience, ability, education, training)
- Effort (physical or mental exertion needed)
- Responsibility (level of accountability and duties)
- Working conditions (environment and hazards)
This is important in practice because pay equity comparisons often turn on whether the roles are truly comparable—rather than whether they share the same job title.
Expansion to Race and Ethnicity
For decades, pay equity laws primarily addressed sex-based wage disparities. California later amended its Equal Pay Act to include race and ethnicity as protected classes (effective 2017).4 This change reflected that wage discrimination is not confined to women and that men of color may also experience wage disparities compared to white men.
The inclusion of race and ethnicity moved California pay equity protections toward broader coverage, though additional expansions (e.g., for other vulnerable communities) remain an ongoing policy discussion.
What an Employee Must Show
To bring a claim, an employee generally must show they are paid less than employees of the opposite sex, another race, or another ethnicity who perform substantially similar work. Litigation typically centers on identifying appropriate comparators and establishing comparability.
Employees do not necessarily need to work in the “same establishment” to be comparable—this can matter in large organizations with multiple sites. Once the employee makes the initial showing, the employer bears the burden to prove a legitimate, non-discriminatory explanation for the pay differential. If the employer meets that burden, the employee may still prevail by showing the stated reason is a pretext.
See, for example, Hall v. County of Los Angeles (2007) 148 Cal.App.4th 318 (discussing comparator issues).5
Common Employer Defenses
Even if an employee shows a wage gap for substantially similar work, employers may defend by showing the differential is based on:
- A seniority system
- A merit system
- A production-based system
- Another bona fide factor other than sex, race, or ethnicity that is job-related and consistent with business necessity
A bona fide factor may include education, training, or experience—but it must account for the entire pay difference, and the employer’s explanation may be challenged as pretextual depending on the facts.
Salary History and Labor Code § 432.3
California has restricted reliance on salary history in pay setting. As amended, Labor Code § 432.3 prohibits employers from asking prospective employees for salary history and limits the ability to justify pay differences based on prior pay.
Retaliation Protections
California’s Equal Pay Act prohibits employers from discharging, discriminating, or retaliating against employees for asserting rights under the Act. California law also prohibits retaliation against employees for discussing wages.
To recover wages for retaliation, an employee generally has one year following the unlawful action to file a lawsuit. (Deadlines can be fact-dependent; legal advice requires a case-specific review.)
Sources
1 Senate Committee on Labor and Industrial Relations, on SB 358 (April 22, 2015).
2 In connection to the Fair Pay Act, signed October 7, 2015 (formerly SB 358).
3 Lab. Code, § 1197.5.
4 SB 1063 Senate Committee Bill Analysis, April 13, 2016.
5 Hall v. Cty. of Los Angeles, 148 Cal. App. 4th 318 (2007).