Expansion of the California Equal Pay Act

In 2017 California enacted several amendments to Labor Code section 1197.5, which resulted in significant expansion of the California Equal Pay Act. While the old law prohibited wage disparity between employees of the opposite sex, under the new law, the protections have been expanded to prevent a wage disparity between employees who are of a different race or ethnicity.

In deciding to expand the protections of Equal Pay Act, the California legislature found that the gender wage gap in California remained steady, with women earning only 84 cents on the dollar compared to men. However, for minority women the disparity is even more substantial, with African American women in California making just 63 cents and Hispanic women less than 43 cents for every dollar earned by white non-Hispanic men.

Due to the history of women receiving lesser pay than men for the same jobs, under the new law, an employee’s prior salary history can no longer be used as justification for a wage disparity.

Exceptions to the California Equal Pay Act

As with prior versions of the law, there are exceptions. The prohibitions against wage disparity apply to employees who are doing substantially similar work, when considering skill, effort, and responsibility, and when performed under similar working conditions. An employer will not be in violation of the law when a wage differential is based on one or more of the following legitimate factors:

• A seniority system.
• A merit system.
• A system that measures earnings by quantity or quality of production.
• A bona fide factor other than sex, race or ethnicity, such as education, training, or experience relevant to the job position and the needs of the business.

An employer is also required to demonstrate that factors relied upon were applied reasonably and account for the entire wage differential. In other words, the employer must prove that any wage disparity is entirely unrelated to an employee’s gender, race or ethnicity.

An employee who was the victim of wage discrimination in violation of the equal pay laws is entitled to recover twice the wages he or she lost due to the employer’s discrimination, plus interest and attorney’s fees.