California Equal Pay Act
(Labor Code section 1197.5) and Labor Code section 432.3
California Equal Pay Act: Frequently Asked Questions
1. Is the California Equal Pay Act new?
No, for decades now, the California Equal Pay Act has prohibited an employer from paying its employees less than employees of the opposite sex for equal work. However, in 2015, Governor Brown signed the California Fair Pay Act, which strengthened the Equal Pay Act in a number of ways and signaled California’s commitment to achieving real gender pay equity.
2. What were the most significant changes to the Equal Pay Act?
- Requiring equal pay for employees who perform “substantially similar work,” when viewed as a composite of skill, effort, and responsibility.
- Eliminating the requirement that the employees being compared work at the “same establishment.”
- Making it more difficult for employers to justify inequities in pay through the “bona fide factor other than sex” defense.
- Ensuring that any legitimate factors relied upon by the employer for pay inequities are applied reasonably and account for the entire pay difference.
- Explicitly stating that retaliation against employees who seek to enforce the law is illegal, and making it illegal for employers to prohibit employees from discussing or inquiring about their co-workers’ wages.
- Extending the number of years that employers must maintain wage and other employment-related records from two years to three years.
3. When were these new changes effective?
These provisions were effective January 1, 2016.
4. Have there been more changes to the Equal Pay Act since January 1, 2016?
Yes. Each year since then has brought further amendments to the Equal Pay Act. Effective January 1, 2017, Governor Brown signed a bill that added race and ethnicity as protected categories. California law now prohibits an employer from paying its employees less than employees of the opposite sex, or of another race, or of another ethnicity for substantially similar work. The provisions, protections, procedures, and remedies relating to race- or ethnicity-based claims are identical to the ones relating to sex. In addition, employers are prohibited from using prior salary to justify any sex-, race-, or ethnicity-based pay difference.
Effective January 1, 2018, the Equal Pay Act covers public employers. And Labor Code section 432.3 was enacted, also effective January 1, 2018, prohibiting employers, with one exception, from seeking applicants’ salary history information and requiring employers to supply pay scales upon the request of an applicant. Most recently, on July 18, 2018, Governor Brown signed amendments clarifying section 432.3. These amendments are effective January 1, 2019.
5. What does the current California Equal Pay Act provide?
The amended Equal Pay Act prohibits an employer from paying any of its employees wage rates that are less than what it pays employees of the opposite sex, or of another race, or of another ethnicity for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.
6. What does “substantially similar work” mean?
“Substantially similar work” refers to work that is mostly similar in skill, effort, responsibility, and performed under similar working conditions. Skill refers to the experience, ability, education, and training required to perform the job. Effort refers to the amount of physical or mental exertion needed to perform the job. Responsibility refers to the degree of accountability or duties required in performing the job. Working conditions has been interpreted to mean the physical surroundings (temperature, fumes, ventilation) and hazards.
7. What are the key differences between the former Equal Pay Act and the Equal Pay Act, as amended?
The main differences are that the current law:
- also prohibits race-, or ethnicity-based wage differences;
- eliminates the requirement that the jobs that are compared must be located at the same establishment;
- replaces a comparison of “equal” work with a comparison of “substantially similar” work;
- makes it more difficult for employers to justify unequal pay based on sex, race, or ethnicity;
- adds new express anti-retaliation protections for workers who assist employees with bringing claims under the Act;
- provides that an employer cannot prohibit workers from disclosing their wages, discussing the wages of others, or inquiring about others’ wages;
- prohibits employers from relying on an employee’s prior salary to justify the sex-, race-, or ethnicity- based pay difference.
8. Under the current law, what do I have to prove to prevail on my Equal Pay Act claim?
Under the current law, an employee must prove that he or she is being paid less than an employee or employees of the opposite sex, of another race, or of another ethnicity who is performing substantially similar work. Once an employee makes this showing, the employer must then prove that it has a legitimate reason for the pay difference.
9. Can I file a claim if the person who earns more than I do has a different job title?
Yes, you may file a claim. Because the Equal Pay Act compares jobs that are “substantially similar,” the job titles that are being compared do not have to be the same. What is important is whether the work itself is “substantially similar.”
10. How is “wage rates” defined?
Although the law does not specifically define “wage rates,” the term refers to the wages or salary paid, and also other forms of compensation and benefits.
11. Under the current law, how may an employer defeat an Equal Pay Act claim?
Under the current law, an employer can defeat an Equal Pay Act claim by proving that the difference in pay for substantially similar work is due to:
- a system that measures production; and/or
- a “bona fide factor other than sex, race, or ethnicity.”
In addition, an employer must show that it applies the above factor(s) reasonably and that the factor(s) accounts for the entire difference in wages. Under the Equal Pay Act, as amended effective January 1, 2019, an employer may not justify any pay difference between employees of the opposite sex, or employees of different race or ethnicity based on an employee’s prior salary. An employer may make a compensation decision based on a current employee’s existing salary, however, any wage differential resulting from that compensation decision must be justified by one or more of the factors listed in the response to this FAQ above.
12. Under the current law, how is the “bona fide factor other than sex, race, or ethnicity” applied?
Under the current law, an employer may defeat an Equal Pay Act claim by proving that the wage differential is due to a bona fide factor other than sex, race, or ethnicity, but to succeed on this defense, the employer must also prove that the factor is
- not based on or derived from a sex-, race-, or ethnicity- based factor;
- job related; and
- consistent with a business necessity.
13. What are some examples of a “bona fide factor other than sex, race, or ethnicity”?
Examples of a “bona fide factor other than sex, race, or ethnicity” include:
- Training; or
- Experience, among other bona fide factors.
14. Are public employers covered by the Equal Pay Act?
Effective January 1, 2018, public employers, such as state, county, and local agencies and entities, are covered by the Equal Pay Act. Beginning January 1, 2018, an employee of a public employer may file an Equal Pay Act claim against his or her employer.
15. When do I need to file my Equal Pay Act claim?
Under the Equal Pay Act, an employee must file a claim within two years from the date of the violation. If the violation is willful, then an employee has three years to file. Each paycheck that reflects unequal pay is considered a violation for the purpose of calculating the deadline for filing.
For example, if an employer begins to pay a female worker less than a male worker for substantially similar work in January 2016, and the employer cannot justify the unequal pay with any available defenses, for a non-willful violation, the female worker has until January 2018 to file a claim to seek recovery going back to January 2016. If she waits until January 2019 to file a claim, she can seek recovery going back only two years, or January 2017.
To use another example, if an employer begins to pay a female worker less than a male worker for substantially similar work in January 2016, but the employer subsequently starts to pay the female worker the same as the male worker beginning in January 2017, and the Equal Pay Act claim is filed in January 2019, the female worker can only go back two years for a non-willful violation, or back to January 2017. Thus, in this example, the female worker has missed the deadline for seeking remedies.
16. Where can I bring a claim to enforce the Equal Pay Act? Must I file an administrative claim before filing a case in court?
An employee who has experienced an Equal Pay Act violation can file a claim with the Labor Commissioner’s Office or file an action in court. For information about filing a claim with the Labor Commissioner’s Office, go to https://www.dir.ca.gov/dlse/Equal_Pay_Act_Instruction_Guide.pdf. An employee does not have to file a claim with the Labor Commissioner’s Office before filing an action in court.
Depending on the nature of the claim, the employee may also file a claim with the California Department of Fair Employment and Housing.
17. What happens after I file my claim with the Labor Commissioner’s Office?
Under California Labor Code section 98.7, the Labor Commissioner’s Office investigates your claim and makes a determination as to whether or not the employer violated the Equal Pay Act. If the Labor Commissioner’s Office determines that no violation occurred, it will dismiss the claim. If the Labor Commissioner’s Office determines that a violation occurred, it will make a demand for remedies. If the employer fails to comply with the Labor Commissioner’s demand for remedies, then the Labor Commissioner files a civil action in court to try to recover any wages, interest, and liquidated damages owed to you.
18. Do I need to file a claim with the California Department of Fair Employment and Housing (DFEH)?
The DFEH enforces the California Fair Employment and Housing Act, which prohibits discrimination based on sex, race, national origin, ancestry, in addition to other protected categories. You may, but are not required to, file a claim with the DFEH if you are only claiming unequal pay based on sex, race, or ethnicity. Because the Labor Commissioner’s Office only investigates the Equal Pay Act, if you have additional claims (for example, if you also claim discrimination in promotion based on sex or if you also claim discrimination based on another protected status), you can also file with the DFEH. For information about deadlines for filing complaints with the DFEH, go to https://www.dfeh.ca.gov/complaint-process/ or call 800-884-1684.
19. May I file a claim under the Equal Pay Act anonymously or in a group with others?
The law states that the Labor Commissioner’s Office shall keep the name of the employee who files an Equal Pay Act claim confidential until it establishes the validity of the claim. However, the Labor Commissioner may reveal the name of the claimant if needed to investigate the claim. Employees who are similarly affected may all file claims against the same employer. These claims may be assigned to the same investigator.
20. What do I get if I prevail in my Equal Pay Act claim?
Under the Equal Pay Act, an employee can recover the difference in wages, interest, and an equal amount as liquidated damages. If an employee files a case in court, he or she can also recover attorney’s fees and costs.
21. What can employers do to evaluate whether they are paying employees in accordance with the Equal Pay Act?
Employers that want to be proactive about their compliance with the Equal Pay Act can start by evaluating the jobs that are substantially similar and assessing whether the men and women who perform those jobs are paid the same. The California Commission on the Status of Women and Girls convened a Pay Equity Task Force to develop materials and resources for stakeholders to consider when seeking to ensure compliance with the Equal Pay Act. Guidance aimed at helping employers take steps to comply with the Equal Pay Act can be found at: https://women.ca.gov/californiapayequity/
22. How long must an employer keep records of employee wages and wage rates?
Under the amended Equal Pay Act, an employer must keep records of wages, wage rates, job classifications, and other terms and conditions of employment for a period of three years. (Labor Code section 1197.5(e).)
Additionally, starting January 1, 2023, an employer must keep records of a job title and wage rate history for each employee for the duration of the employment plus three years after the end of the employment. The records shall be open to inspection by the Labor Commissioner in order to determine if there is still a pattern of wage discrepancy. (Labor Code section 432.3(c)(4).)
23. Can I ask my employer how much other employees are paid?
Yes, an employee can ask his or her employer about how much other employees are paid, however, the law does not require an employer to provide that information.
24. Can my employer retaliate against me for asking about other employees’ wages?
An employer may not prohibit an employee from disclosing his or her own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise rights under the Equal Pay Act. Accordingly, an employer may not retaliate against an employee for engaging in such conduct.
25. May a prospective employer ask me what I am currently paid or was paid in the past?
Effective January 1, 2018, Labor Code section 432.3 prohibits an employer from, either orally or in writing, personally or through an agent, asking any information concerning an applicant’s salary history information, which includes compensation as well as benefits. Furthermore, the law prohibits an employer from relying on an applicant’s salary history information as a factor in determining whether to offer employment at all or in determining what salary to offer.
An exception to this provision is salary history information that is disclosable to the public under either the California Public Records Act or the federal Freedom of Information Act. Thus, an employer may seek the salary history information of an applicant for employment during times when the applicant worked for a public employer and the applicant’s salary was disclosable.
An employer may ask an applicant for his or her salary expectations for the position, as distinguished from asking what the applicant earned in the past.
Section 432.3, as amended, defines “applicant” to mean someone seeking employment with the employer who is not currently employed with that employer.
All employers should review their job applications and train hiring personnel to ensure compliance with section 432.3. For example, an employer should consider removing questions seeking an applicant’s current or past salary.
26. May I voluntarily disclose my salary history information to a prospective employer?
Pursuant to Labor Code section 432.3, an applicant may voluntarily disclose his or her salary history information to a prospective employer, as long as it is being done without prompting from the prospective employer. If an applicant voluntarily and without prompting from the employer discloses salary history information, the prospective employer may factor in that voluntarily disclosed information in determining the salary for that person. An employer, however, is prohibited from relying on prior salary to justify a pay difference between employees of the opposite sex, or different race or ethnicity, who are performing substantially similar work because that violates the Equal Pay Act.
27. Is an employer required to provide the pay scale for an open position to an applicant for that position?
Pursuant to Labor Code section 432.3, upon reasonable request, an employer shall provide the pay scale for a position to an applicant applying for employment.
28. Is an employer required to provide the pay scale to an employee for their current position?
Upon request, an employer shall provide an employee with the pay scale for their current position.
29. Is an employer required to include the pay scale on job postings?
As of January 1, 2023, an employer with 15 or more employees must include the pay scale for a position in any job posting. If an employer with 15 or more employees engages a third party to announce, post, publish, or otherwise make known a job posting it must provide the pay scale to the third party and the third party must include it within the job posting.
The Labor Commissioner interprets this to mean that the pay scale must be included within the job posting if the position may ever be filled in California, either in-person or remotely.
30. Who is counted as an employee to determine whether an employer has 15 or more employees?
Although the statute does not specify how employers should count employees, the Labor Commissioner interprets this requirement consistent with how it counts employees for the purpose of 2022 COVID-19 Supplemental Paid Sick Leave and minimum wage rates, as detailed in previously issued FAQs on the topic. At least one of the employees must be currently located in California.
31. How is “pay scale” defined?
Section 432.3, as amended, defines “pay scale” to mean the salary or hourly wage range the employer reasonably expects to pay for a position. An employer who intends to pay a set hourly amount or a set piece rate amount, and not a pay range, may provide that set hourly rate or set piece rate.
32. Must the pay scale include bonuses, tips, or other benefits?
No. Any compensation or tangible benefits provided in addition to a salary or hourly wage are not required to be posted. The employer may include this information to make its recruitment efforts more competitive and employers are cautioned other forms of compensation may be considered for equal pay purposes. A legally compliant job posting only requires the “salary or hourly wage range that the employer reasonably expects to pay for the position.”
33. Must the pay scale include piece rate or commission wages?
Yes. State law allows employers to compensate employees, in whole or in part, on a task, piece, or commission basis. (Labor Code section 200). If the position’s hourly or salary wage is based on a piece rate or commission, then the piece rate or commission range the employer reasonably expects to pay for the position must be included in the job posting.
34. Can employers link to the salary range in an electronic posting or include a QR code in a paper posting that will take an applicant to the salary information?
No. The pay scale shall be included within the posting.
35. Where and when can a person file a claim if they were aggrieved by a violation of Labor Code Section 432.3?
The person may file a complaint with the Labor Commissioner’s Office, the state agency charged with enforcement. A written complaint must be filed within one year after the date the person learned of the violation.
A person may also bring a civil action for injunctive relief and any other relief that the court deems appropriate.
36. What happens if an employer violates Labor Code Section 432.3?
An employer found in violation of Labor Code section 432.3 may be subject to civil penalties. The civil penalties are no less than $100 and no more than $10,000 per violation.
37. Am I protected from retaliation if I complain about an Equal Pay Act violation?
Yes, the amended Equal Pay Act specifically prohibits an employer from retaliating against an employee for “any action taken by the employee to invoke or assist in any manner” with the enforcement of the Equal Pay Act.
38. What is my deadline to file a retaliation claim with the Labor Commissioner?
Unlike an Equal Pay Act claim, which can be filed within two years of the date of the violation or three years, if willful (see No. 15 above), an employee must file a retaliation claim with the Labor Commissioner within one year of the retaliation. Alternatively, an employee may file a civil action for retaliation in court within one year of the retaliation. An employee does not have to file a retaliation claim with the Labor Commissioner before filing an action in court.
39. What do I get if I prevail in my retaliation claim?
Under the California Labor Code, an employee who prevails in a retaliation claim may be awarded reinstatement, back pay, interest on back pay, and possibly other remedies.
40. Where can I get additional information about the Equal Pay Act and my rights and responsibilities?
The California Commission on the Status of Women and Girls convened a Pay Equity Task Force to develop materials and resources for stakeholders to consider when seeking to ensure compliance with the Equal Pay Act. These materials and resources can be found at: https://women.ca.gov/californiapayequity/.
Employers, do you want to commit to equal pay in your workplace? Take the Equal Pay Pledge hosted by the First Partner, the California Commission on the Status of Women and Girls, and the California Labor and Workforce Development Agency.