California Equal Pay Act: Unequal Pay for Substantially Similar Work
California employees may have a legal claim when they are paid less than employees of another sex, race, or ethnicity for substantially similar work.
The employees do not need to have identical job titles. They do not necessarily need to work in the same office. And, an employee generally does not need to prove that the employer deliberately intended to discriminate. What matters is the work actually performed, the difference in compensation, and whether the employer can legally justify that difference.
Do You Believe You Are Being Paid Less for Comparable Work?
We evaluate substantial equal-pay and employment-discrimination claims throughout Sacramento and California. We can assess the available comparators, the employer’s likely explanations, potential damages, and the practical options for proceeding. Contact us for a prompt evaluation of your potential case.
What Does the California Equal Pay Act Prohibit?
California Labor Code section 1197.5 prohibits employers from paying an employee less than employees of another sex, race, or ethnicity who perform substantially similar work under similar working conditions.
The comparison is based on the work as a composite of:
- Skill: The experience, training, education, and ability required to perform the job.
- Effort: The physical or mental exertion needed to do the work.
- Responsibility: The employee’s accountability, authority, and importance to the organization.
- Working conditions: The physical surroundings, hazards, and other conditions under which the work is performed.
California’s standard is broader than a requirement of “equal work.” The positions need only be substantially similar when considered as a whole. The law applies to public and private employers regardless of size and generally reaches all forms of compensation – not only salary or hourly wages. Compensation may include bonuses, commissions, stock, benefits, vacation pay, allowances, and other forms of remuneration.
Different Job Titles Do Not Necessarily Defeat an Equal-Pay Claim
Employers sometimes assign different titles to employees who perform essentially comparable work. A title difference alone does not determine whether the work is substantially similar. For example, an employer may call one employee an “account manager” and another a “senior client specialist.” If both employees manage comparable accounts, exercise similar authority, solve similar problems, and bear similar responsibility, their work may still be substantially similar.
On the other hand, matching titles do not automatically establish a claim. Two employees with the same title may manage substantially different budgets, supervise different numbers of employees, possess different technical responsibilities, or work under materially different conditions.
The analysis focuses on actual job content—not labels.
What Must an Employee Show?
An employee generally begins by identifying one or more employees of another sex, race, or ethnicity who:
- Received greater compensation;
- Performed substantially similar work;
- Worked under similar working conditions; and
- Worked for the same employer, although not necessarily at the same location.
The employee does not have to prove discriminatory intent under the California Equal Pay Act. Evidence showing that a manager made biased remarks may strengthen the case, but such remarks are not required to establish an unlawful pay disparity. A useful comparison should address the employees’ actual duties, responsibilities, experience, performance, location, seniority, productivity, and complete compensation—not merely their titles and base salaries.
When May an Employer Lawfully Pay Employees Differently?
Not every pay difference is unlawful. An employer may attempt to establish that the entire difference resulted from one or more legally permissible factors, such as:
- A seniority system;
- A merit system;
- A system measuring earnings by the quantity or quality of production; or
- A bona fide factor other than sex, race, or ethnicity, such as relevant education, training, or experience.
Simply identifying a possible neutral explanation is not enough. The employer must demonstrate that the factor was reasonably applied and accounts for the entire pay difference. When relying on education, training, experience, or another bona fide factor, the employer must also establish that the factor is job-related and consistent with business necessity. The defense may be weakened if an alternative business practice would serve the same purpose without producing the pay disparity.
An explanation also deserves scrutiny when it was created only after the employee complained or was not consistently applied to other employees. For more information see California Labor Commissioner’s Equal Pay Act page.
Can an Employer Rely on Prior Salary?
Prior salary cannot, by itself, justify an unequal rate of compensation under California law. An employer may consider a current employee’s existing compensation when making a new compensation decision, but any resulting disparity must still be fully justified by legally permissible factors.
This is important because basing each new salary on an employee’s prior salary can perpetuate historical wage disparities throughout a career.
Examples of Potential Equal-Pay Violations
Facts that may warrant closer investigation include:
- A woman learns that recently hired male employees performing comparable work receive substantially higher salaries.
- Latino employees receive lower bonuses than employees of another race who manage comparable accounts and meet similar performance goals.
- An employee returns from pregnancy leave and discovers that comparable employees received raises or promotions that she did not receive.
- Employees with different titles perform substantially similar work, but the employer uses the title difference to justify materially different compensation.
- A manager claims the difference reflects performance, but the employees’ evaluations and measurable results do not support that explanation.
- An employer relies on negotiation as the reason for the disparity even though its compensation practices consistently disadvantage employees of a particular sex, race, or ethnicity.
These facts do not automatically establish liability. The complete employment history, comparator evidence, compensation records, and the employer’s justification for pay difference must be examined together.
What Evidence Can Help Prove an Equal-Pay Claim?
An employee may not initially know every detail about a coworker’s compensation. The following information can still be particularly useful:
- Job postings containing salary ranges;
- Organizational charts and job descriptions;
- Offer letters, compensation notices, and pay statements;
- Bonus and commission plans;
- Performance reviews and productivity records;
- Emails describing the employee’s duties or level of responsibility;
- Records showing accounts, projects, budgets, or employees managed;
- Statements by coworkers concerning their compensation or responsibilities;
- Evidence showing who replaced the employee and what the replacement was paid;
- Communications explaining why a raise or promotion was denied; and
- Statements suggesting sex, race, ethnicity, pregnancy, or another protected characteristic affected compensation.
Employees should preserve records they lawfully possess, but should not improperly access personnel files, confidential payroll systems, or another employee’s private records.
Retaliation for Raising an Equal-Pay Concern
An employer may not retaliate against an employee for invoking equal-pay rights, discussing wages, assisting another employee, or participating in enforcement of the law.
Retaliation may include:
- Termination or demotion;
- Reduced hours, compensation, or responsibilities;
- Unwarranted discipline or negative evaluations;
- Exclusion from important meetings or projects;
- Denial of promotion opportunities; or
- Pressure to resign.
A compensation complaint should be factual and specific whenever possible. Identify the suspected disparity, comparable work, and requested explanation without exaggerating facts that are not yet known.
What May an Employee Recover In An Equal Pay Act Case?
Available relief under the California Equal Pay Act may include:
- The unpaid wage difference;
- Interest;
- An additional equal amount as liquidated damages;
- Costs; and
- Reasonable attorney’s fees in a successful court action.
For example, if an employee lost $50,000 in compensation because of an unlawful disparity, the potential recovery may include the $50,000 wage difference plus another $50,000 in liquidated damages, along with interest and potentially recoverable fees and costs. The actual calculation depends on the facts and applicable defenses.
Depending on the circumstances, related discrimination or retaliation claims may provide additional remedies.
How Long Does an Employee Have to Bring a Claim?
An Equal Pay Act claim generally must be filed within three years after the last actionable compensation event. A claim may arise when an unlawful compensation decision is adopted, when the employee becomes subject to it, or when the employee receives compensation affected by that decision.
Under the current statute, an employee may potentially recover for the period during which the violation existed, up to six years. Different deadlines may govern retaliation, discrimination, or other related claims.
Because filing and recovery periods are not necessarily the same—and because deadlines can depend on the precise claims and events—employees should not delay obtaining individual advice.
Equal Pay Act Claim or Employment-Discrimination Claim?
Unequal compensation may support overlapping legal theories.
The California Equal Pay Act focuses on a pay disparity involving substantially similar work. It does not generally require proof of discriminatory intent. A claim under California’s Fair Employment and Housing Act focuses on whether the employer intentionally discriminated because of a protected characteristic. Evidence such as biased statements, inconsistent explanations, discriminatory promotion decisions, or a broader pattern of unequal treatment may be important to that claim.
A careful evaluation should consider both theories rather than treating every wage disparity as only an Equal Pay Act matter.
Frequently Asked Questions
Must the better-paid employee have the same job title?
No. Different titles do not defeat a claim if the employees perform substantially similar work when skill, effort, responsibility, and working conditions are considered together.
Must the employees work in the same office?
Not necessarily. California’s law is not limited to employees working at the same physical establishment.
Does the law protect only women?
No. It prohibits specified compensation disparities based on sex, race, or ethnicity. Employees of any sex, race, or ethnicity may potentially bring a claim.
Do I have a claim simply because a coworker earns more?
Not automatically. The other employee must be an appropriate comparator, and the employer may have a lawful explanation such as seniority, measured performance, relevant experience, or another properly applied bona fide factor.
Can my employer prohibit discussions about salary?
California law generally protects employees’ ability to discuss or inquire about wages. An employer may still enforce legitimate confidentiality rules concerning information an employee obtained through special access as part of the employee’s job.
Should I confront my employer before speaking with an attorney?
That depends on the evidence, the employee’s objectives, and the risk of retaliation that the employee is willing to accept before making a complaint. Obtaining legal advice first may help the employee weigh all these factors correctly and avoid various strategic mistakes.
Contact us to discuss and evaluate your potential Equal Pay Act claim in California.