California Laws on Equal Pay

California restricts an employer’s ability to ask about salary information and use it in setting pay.

California has some of the strongest protections in the nation guaranteeing that employees receive equal pay for similar work. These laws are designed to narrow the gender pay gap and end discriminatory pay practices, particularly against women and racial and ethnic minorities.

Ban on Asking Applicants About Salary History

Following the lead of a few other states, California passed a salary history ban that takes effect on January 1, 2018. The law, which applies to all California employers, prohibits employers from:

  • asking applicants about their current or past salaries or benefits
  • seeking such information from other sources or through an agent, or
  • relying on such information to decide whether to offer a job or what salary to offer.

This means employers can no longer ask questions like “What is your current salary?” on a job application or other written forms. Nor can an employer ask an applicant what he or she is currently making or used to make at previous jobs. The law also requires employers to provide an applicant with a pay scale for the position upon receiving a reasonable request.

Two limited exceptions apply to the salary history ban:

  • Public record disclosures. The law does not apply to salary history information that is disclosable under state or federal law—for example, under the California Public Records Act or Freedom of Information Act.
  • Voluntary disclosures. The law also does not prohibit an applicant from voluntarily offering salary information without any prompting by the employer. In that case, the employer may consider the information in setting the applicant’s salary. However, under other California laws mentioned below, the applicant’s previous salary cannot be the sole justification for paying the applicant less than an employee of the opposite gender for substantially similar work.

Employers are still free to ask applicants how much they would like to make in the position. For example, employers are likely on safe legal ground asking questions like “What are your salary expectations for this position?”

(To learn more about what employers can and can’t ask, see our article on illegal questions during interviews.)

California’s Equal Pay Act

California’s Equal Pay Act has been amended in recent years to offer stronger protections to employees. Under the law, which applies to all employers, an employer cannot pay an employee less than employees of a different gender, race, or ethnicity for substantially similar work.

Substantially Similar Work

Work is substantially similar when it is performed under similar working conditions and requires similar skill, effort, and responsibility. Factors to consider include the experience, training, education, and ability needed to perform the work; the degree of physical or mental exertion involved in the work; and the degree of accountability or duties associated with the job. Working conditions refers to the physical environment in which the job is performed—for example, an office job is performed under very different conditions than coal mining job. However, the work does not have to be performed at the same employer location in order to be substantially similar.

Acceptable Grounds for Providing Different Pay

Employers may, however, pay different wages to employees based on:

  • a seniority system
  • a merit system
  • a system that measures earnings by the quantity or quality of work, or
  • a bona fide factor other than sex, race, or ethnicity.

A “bona fide factor other than sex, race, or ethnicity” means a job-related reason that is consistent with business necessity. This is a defense to an equal pay violation claim, so employers have the burden of proof. They must also show that the bona fide factor was applied reasonably and accounts for the entire difference in pay. And, if the employee can show a different business practice that would have achieved the same purpose but not resulted in unequal pay, the employer will be found in violation of equal pay laws.

For example, an employer can typically pay a higher salary to someone with more education, training, or experience relevant to the position. However, an applicant’s prior salary alone is not sufficient to justify paying a lower salary for substantially similar work. For example, an employer cannot pay a female employee a lower salary than a male employee simply because she earned less at her previous job.

It’s also illegal for California employers to tell employees not to discuss their wages or to retaliate against an employee who has exercised his or her rights under the equal pay laws.

Equal Pay Complaints

Employees who are receiving lower pay than a coworker of a different gender, race, or ethnicity in a substantially similar job may file an administrative complaint with the California Labor Commissioner or file suit in court. The timeline for filing a claim or lawsuit is typically two years from the equal pay violation. However, retaliation claims must be filed within six months. (For more information on California law, see our California employment law page.)

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