California expands Equal Pay Act to ban unequal pay based on race

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Posted by Legal Team On August 15, 2022


A new bill will ban unequal pay based on race or ethnicity.

With the New Year come new legal responsibilities under state law for California employers. On January 1, 2017, the state’s Equal Pay Act will be expanded to forbid unequal pay based not only on gender, but also on race or ethnicity.

Equal Pay Act’s prohibition of unequal wages based on gender

Currently, the Equal Pay Act prohibits an employer from paying an employee lower wages than the rate employees of the opposite sex are paid for “substantially similar work,” considering “skill, effort and responsibility” when performed under “similar working conditions.”

The employer can only get around unequal pay between genders if it can show that the inequality is legitimately based entirely on reasonable application of at least one of these factors:

  • Seniority system
  • Merit system
  • System that bases wages on production quantity or quality
  • Bona fide factor other than gender like experience, education or training

To show a bona fide factor, the employer must prove it is not based on a “sex-based differential in compensation”; is related to the job; and meets a business necessity. If an alternative practice can be shown that would meet the business purpose without the wage gap, this factor cannot excuse the wage inequality.

For a violation of the Act, the employer is liable for the wage difference plus interest, plus an equal amount in damages. The Act provides for complicated legal remedies. Basically, an employee can file a complaint with the Division of Labor Standards Enforcement, a state agency. The DLSE may oversee the employer’s payment of damages to the employee; conduct an investigation and enforce the payment of damages, if appropriate; or file a lawsuit on behalf of the employee.

Alternatively, the employee may sue his or her employer in a civil action.

Paying an unequal wage under the Act may result in criminal penalties against the employer as well.

It is also illegal for an employer to fire or retaliate against an employee who asserts rights under the Act.

Expansion of equal pay requirement to race and ethnicity

The amendment to the Act taking effect on January 1 will treat unequal pay between people of different races or ethnicities the same way it now treats unequal pay between genders.

The Senate Floor Analyses of August 24, 2016, provides insight into the reasons people supported the change. The Analyses notes that the bill’s author believes that wage discrimination is not only based on gender, but also on race, and that women and men of color should be able to assert legal claims when they are paid less than white colleagues for the same work.

In addition, the Analysis cites a 2013 study that found that African American males earn only three-quarters of the average salaries of white men.

Anyone receiving unequal pay for the same work or experiencing other types of discrimination or harassment in employment should speak with a lawyer to understand potential legal remedies.

The attorneys at The Armstrong Law Firm with offices in San Francisco, Sausalito, San Jose and Oakland represent employees throughout San Francisco, Silicon Valley and the entire Bay Area in matters of equal pay, employment discrimination and harassment, wage and hour violations, retaliation, family leave and other employment law issues.