Know Your Rights:

California’s Equal Pay Act forbids your employer from paying you less than a coworker of a different sex, race or ethnicity who is performing “substantially similar” work as you, unless this difference can be justified by a legitimate factor that is unrelated to sex, race or ethnicity (examples provided below). Importantly, it does not matter whether your employer is intentionally paying you less. If you and your coworker are performing substantially similar work and your employer cannot explain the pay difference by pointing to a reason that has nothing to do with your sex, race or ethnicity, this may be a violation of the law.

What is included in “pay”?

“Pay” includes things like salary, wages, overtime pay, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, gasoline allowances, reimbursement for travel expenses, and benefits.

What counts as “substantially similar” work?

To determine whether the work done by employees of a different sex, race or ethnicity is “substantially similar” under the Fair Pay Act, you look at the combination of skill, effort, and responsibility required for each position. Your job titles do not need to be the same.

Skill is typically measured by factors such as the experience, ability, education, and training required for performing the job. The focus is on the skills required to do the work in question, not on the skills that the individual employees may have. For example, two accounting jobs could be “substantially similar” even if one of the accountants has a master’s degree in neurobiology while the other does not, since this degree would not be required for the job.

Effort refers to the amount of physical or mental effort needed to perform a job. For example, on some assembly lines, the person at the end of the line must assemble part of the product and examine the completed product to ensure that it is correctly assembled before sending it off to be packaged, whereas the other assembly line positions do not require someone to do this additional work. Given the greater effort required to fulfill the job as the last person on the assembly line, it would not necessarily violate the Fair Pay Act to pay that person more based on this extra effort.

Responsibility refers to the degree of accountability required in performing the job. For example, if two bartenders (of the opposite sex) generally have the same duties but one of them is additionally responsible for counting and recording the amount of cash in the cash registers at the end of the night, it might not be unlawful for their employer to pay that bartender more based on this extra responsibility. In contrast, a very minor difference in responsibilities, like turning on the lights at the beginning of a shift versus turning off the lights at the end of the night, would not likely justify a difference in pay.

“Similar Working Conditions”

For two employees of a different sex, race or ethnicity to be working under “similar working conditions” means that their working environment and situation must be similar and does not mean that they must necessarily work at the same job site or physical location. For example, if two employees of a coffee shop chain perform work that is substantially similar in terms of the skill, effort, and responsibility involved at two different locations, which share the same basic features, sell similar products, and serve a similar volume of customers, they are still working under “similar working conditions.” Therefore, the fact that they work in different locations would not (by itself) justify a difference in their pay. In other words, the employer could not use this fact alone as a defense or excuse for paying the employee of one sex, race or ethnicity more than the other employee.

An employer can pay you less than a coworker of a different sex, race or ethnicity who performs substantially similar work under similar working conditions if it can demonstrate that the pay difference is based on one or more of the following factors:

1. a seniority system (a system that bases pay on the time you’ve worked for the company or in a certain position);
2. a merit system (an objective system of evaluating and paying employees based on their performance);
3. a system that measures earnings by quantity or quality of production (a pay system based on how much you produce at work, such as under a piece rate or commission system); or
4. a bona fide (i.e. real or authentic) factor other than sex, such as education, training, or experience as long as this factor is:

• not based on or derived from a sex, race or ethnicity-based differential in compensation (for example, an employee’s height or weight, which often are used as a proxy for sex) and
• Related to the job in question; and
• Consistent with business necessity (which means that it effectively fulfills an overriding legitimate business purpose.)

If the employer is able to demonstrate these three things about the factor it’s relying on to justify a difference in pay, the employee who is being paid less will have a chance to show that an alternative business practice exists that would serve the same business purpose without producing the wage difference.

In addition to showing it relied on one (or more) of the factors above, to justify a pay difference between two employees of a different sex, race or ethnicity who are doing substantially similar work, the employer also will have to demonstrate that: (1) it applied each of the factor(s) reasonably, and (2) that the factor(s) relied upon account for the entire difference in pay.

So how would this all look in practice? Here’s an example:

Suppose two employees (a man and a woman) are hired by an employer at the same time to do the same work under similar working conditions. However, the employer pays the male employee — who had similar skills and education but one more year of prior work experience than the woman at the time of hire — a salary 50 percent higher than what it pays the female employee. If the woman challenges this unequal pay under the California Equal Pay Act, then the employer would have to show several things to defend its pay decision: First, it would have to show that it knew about and actually based the employees’ salaries on their respective levels of prior work experience. Second, it would have to demonstrate that the “prior work experience” on which it relied was related to the job(s) in question. Third, the employer would have to show that it applied this “experience” factor reasonably — in other words, that it was reasonable to pay the man 50 percent more for his one additional year of experience. Finally, the employer would have to demonstrate that the difference in these employees’ prior work experience explained the entire difference in their salaries.

Under California’s Equal Pay Act, it is illegal for an employer to forbid an employee from disclosing his or her wages, talking about his or her coworkers’ wages, asking about another employee’s wages, or helping or encouraging coworkers in exercising their right to equal pay.

It is also illegal for an employer to retaliate against (punish) or discriminate against you for engaging in any of this conduct, or for complaining to your employer or to a government agency or court about being paid less than a co-worker of a different sex, race, or ethnicity. For example, it is illegal for an employer to fire you, demote you, reduce your work hours, or reduce your pay because you complained about being paid less than a co-worker of a different sex, race, or ethnicity, or you spoke out against a practice of paying employees unequally.