California Equal Pay Act

Back in 1949, California introduced its first Equal Pay Act. Contained within the document was a statement, “No employer shall pay any individual in the employer’s employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs.” For most of us, that statement would seem straightforward and unequivocal, but for decades employers continued to use loopholes to underpay employees based on their gender and, sometimes, race, ethnicity, and other characteristics.

Seventy years later, the problem still exists. In 2016, the LA Times reported on a comprehensive study on the gender pay gap. It found that women earned 80 cents for each dollar men made. Race and ethnicity also played a role: For Latina women, it was just 43 cents compared to each dollar earned by white men. Five years later, the latest estimates put it at $0.82 for women for each dollar a man earned. Not all of this is down to discrimination, and there’s a myriad of socio-economic factors that contribute to gender pay disparities. But in 2021, discrimination on pay still exists. And, while we have yet to see the full data, the coronavirus pandemic might have made things worse.

• June 1, 2023 - Labour claims that the gender pay gap between women and men in their 50s will not close until 2050.
• May 1, 2023 - What is Pay Equity and How Are Pay Equity Audits Beneficial?
• April 1, 2023 - The Biden-Harris Administration Promotes Gender Equity and Equal Pay through President Biden's Invest in America Agenda.
• March 1, 2023 - Statement by President Joe Biden at the 14th anniversary of the Lilly Ledbetter Fair Pay Act.
• February 1, 2023 - California's latest bill could be another step forward in college athlete pay. California was the catalyst for NIL money being made available to athletes. Now the state may take it one step further.
• January 1, 2023 - Equal Pay to Women Team USA as Cantwell-Capito bill heads to president's desk.
• December 1, 2022 - Salary posting is just the start for pay transparency.
• November 16, 2022 - CA Governor Gavin Newsom has signed a new pay transparency act that will require significant changes in how employers draft job postings and how they report pay data to the state.
• October 1, 2022 - CA job seekers will see salary ranges on job postings soon, thanks to a new salary bill signed into law by Governor Gavin Newsom.
• September 1, 2022 - CA lawmakers approve landmark of over half a million fast food workers bill.
• August 14, 2022 - Equal pay deal for U.S. women's soccer approved by U.S. District Judge R. Gary Klausner. A $24 million settlement between U.S. women soccer players and the sport’s American governing body was given initial approval.
• August 1, 2022 - The California Department of Fair Employment and Housing (DFEH) revealed it had engaged in a 3 year investigation of Tesla and found evidence of discrimination against black employees at the company’s Fremont, CA factory.
• July 1, 2022 - The Department of Fair Employment and Housing (DFEH) resolved a housing harassment complaint brought by a Vacaville tenant against her property
  management company.
• June 1, 2022 - CA Supreme Court Rules Meal and Rest Break Charge Considered "Wages" Potentially Prompting Sanctions for Violations.
• May 17, 2022 - CA legislators are pushing 2 bills that would require companies reporting more information about their internal and pay practices. The bills are opposed by business groups who claim that the data could be taken out of context.
• May 1, 2022 - Companies must focus on pay equity in order to attract, retain and develop female workers because of the tight labor market and the exclusion of over a million women from the workforce due to the pandemic.
• April 12, 2022 - Another former employee of Riot Games is suing the company over gender discrimination, along with additional allegations.
• April 3, 20022 - U.S. Equal Employment Opportunity Commission - Equal Pay Compensation Discrimination Update: The Equal Pay Act stipulates that equal pay must be paid to men and women working in the same place. They do not have to be the same job, but must be substantially similar.
• March 1, 2022 - The 2022‑23 Budget proposal of CalHR California Leads Proposal: Establish Equal Employment and Opportunity Academy (4 Positions).
• February 1, 2022 - Office of Governor Gavin Newsom update - CA Signs Equal Pay Pledge. CA highlights investments, actions to advance pay equity.
• January 1, 2022 - Riot Games agrees to $100,000,000 settlement and systemic reforms to resolve claims of workplace sex discrimination & harassment.
• September 23, 2021 - California workers get additional 2 weeks paid sick for COVID-19
• September 22, 2021 - CA limits use of productivity quotas by Amazon and other warehouse companies

The studies released in the mid-2010s, as well as the resulting anger they unleashed, forced California politicians’ hands. In 2015, then-Governor Jerry Brown signed the California Fair Pay Act (SB 358). The bill, which Senator Hannah-Beth Jackson authored, was described as the “toughest equal-pay measure in the nation.” The 2015 bill was designed to strengthen the 1949 EPA, with a particular focus on getting rid of those loopholes that employers exploited for decades.

The 2015 bill, alongside later amendments, would aim to eliminate California pay discrimination in three ways. First, the language used for employment regulation would be clearer so that employers had less wiggle room to exploit loopholes. Secondly, employers would be obligated to keep better records of pay structures. Finally, and perhaps most importantly for anyone pursuing an equal pay lawsuit in California, the Fair Pay Act bars employers from retaliating or discriminating against employees who challenge pay disparity in their workplace.

As with many laws and regulations, the Equal Pay Act is seen as imperfect by many campaigners and politicians. As such, it can be amended and extended. The Fair Pay Act signed by Governor Brown in 2015, for example, is an extension of the 1949 Equal Pay Act. But each year since, amendments have been added, coming into force on January 1^st of the following year.

The most recent amendment to the Equal Pay Act came into force on January 1, 2021. It requires private employers (with over 100 employees) to submit an annual pay data report, highlighting salaries and providing data on gender, race, ethnicity. Transparency is seen as one of the key weapons for those fighting for pay parity, and campaigners believe that amendments like these will encourage employers to pay fairly.

The basis of the Californian Equal Pay Law was enshrined in the 1949 Equal Pay Act. However, in the mid-2010s, the EPA received a much-needed modernization through the Fair Pay Act. A brief timeline is shown below:

October 6^th, 2015 – Governor Jerry Brown signs Fair Pay Act into law.

January 1^st, 2016 – Fair Pay Act comes into force. Some of the main points:

• Equal pay is awarded in cases of “substantially similar work when viewed as a composite of skill, effort, and responsibility.”
• Employers with multiple locations would be obliged to pay equal salaries for equal work regardless of where the employee was based.
• Employers could no longer ban discussion of salaries if the purpose is to investigate fair pay.
• Employers were required to keep wage records for three years.

January 1^st, 2017 – Race and Ethnicity amendment added to Fair Pay Act.

January 1^st, 2018 – Equal Pay Act was expanded to also include public employers.

January 1^st, 2019 – Amendment came into force, stating that employers can no longer justify pay differences between employees of the opposite sex (or different races or ethnicities) based on previous salaries.

January 1^st, 2020 – Women on Boards amendment comes into force, requiring representation of females on the boards on publicly traded companies.

September 30^th, 2020 – Governor Gavin Newsom signs new pay reporting law, Senate Bill 973.

March 31^st, 2021 – Senate Bill 973 comes into law, requiring firms (of over 100 employees) to file an Employer Information Report with the Department of Fair Employment and Housing. The report should detail pay structures, and any disparities based on race, ethnicity, or gender.

California has fairly clear directives on wages and working times across the state. As of 2021, the hourly minimum wage for workers in California is $13 per hour if the business has 25 or fewer employees and $14 per hour if the company has more than 25 employees. Overtime should be paid – at 1.5X the hourly rate – if the employee works over eight hours in a day or over 40 hours per week. If overtime exceeds 12 hours in a day, employees should receive twice the hourly rate. California employment law also covers areas like meal breaks and rest breaks. These will depend on the length of shift on a particular day. A 30-minute meal break should be provided to anyone working more than a five-hour shift, although employees can agree to waive this if their shift is six hours long or less. There are some exemptions to California’s wage laws. Mostly, it is due to work carried out by independent contractors. An Uber driver or a freelance website designer, for example, might be considered an independent contractor, and they will not be covered by the legal directives mentioned above.

The primary law governing equal opportunity employment in California falls under the California Fair Employment and Housing Act (FEHA) of 1959. Other laws and regulations, including federal laws and the previously mentioned Equal Pay Act, intertwine with FEHA, but the latter remains the primary legal landing point. FEHA prohibits employment discrimination based on race, ethnicity, color, nationality, sex, age, sexual orientation, disability (whether mental or physical), and pregnancy. These groups are called protected classes or protected categories. Contained within FEHA is the right for the individual to pursue punitive damages, i.e., financial compensation, when an employer has discriminated against you, and you fall into one of these protected classes. So, if you are pursuing an unfair gender pay lawsuit, some of your legal rights will ultimately come from FEHA.

California has moved to address gender equality in the workplace in several areas over the last few years, including legal provisions that govern equality from the top to bottom of organizations. For example, in 2018, then-Governor Jerry Brown signed the Senate Bill, Women On Boards, to ensure that publicly traded companies with all-male directors’ boards had to hire at least one female director. This law came into force on January 1^st, 2020. In 2021, the law requires that at least two females have seats on boards with five members. Quotas, as these requirements are called, are not without controversy, and some critics claim they are unconstitutional. However, they are seen by gender equality campaigners to get fair representation on corporate boards.

But through all strata of the workplace, Californians are protected by gender equality laws – or at least they should be. The laws in California are sometimes cited as being more complicated than in other states, but they are also more comprehensive, offering women more rights and legal recourse than most states. If you are unsure of your rights on gender pay parity, you should speak to a gender equality attorney for advice on how to pursue an equal pay lawsuit in California.

A statute of limitations is the maximum amount of time that can elapse before legal proceedings are filed. In short, if too much time has elapsed from the time the offense was committed, then you might not be able to file a lawsuit. If you are unclear on your rights under the statute of limitations, then contact a pay equality law firm. When it comes to gender pay equality statute of limitations in California, the law is fairly clear: You have two years to file the case from the date of violation; three years if the discrimination was willful on the part of the employer. For clarity, the violation date here usually refers to the date of the paycheck, or paychecks, in question.

While some battles have been won over equal pay in recent years, there is still a lot of work to do. Thousands of women across the state are pursuing gender pay lawsuits against Californian companies who are in violation of equal pay laws. For example, last year, three women were successful in getting a class-action equal pay lawsuit certified by a judge. The women will now represent up to 4,000 female employees of Oracle Corp. The class action suit accuses Oracle of underpaying women who were performing the same job as male employees at the technology firm. In 2021, The State of California is also pursuing a case against Riot Games – publisher of League of Legends – for gender pay discrimination, among other workplace violations.

Oracle and Riot Games are two companies with a massive global reach whose pay legal discrimination cases have become a widespread controversy among equal pay campaigners. However, there are gender discrimination issues across every type of industry in California. It does not matter if you work in a dry cleaner, a restaurant, or have a high-powered tech job in Silicon Valley: equal pay law is there to protect you. If you believe you are being paid less than a male colleague for, as the law states, “substantially similar work,” then you should consider contacting a qualified employment lawyer to seek compensation.

How Do I Prove My Employer Is in Breach of the Equal Pay Act?

The law requires businesses to keep records of wages with respect to gender and other protected classes. If an investigation takes place, your employer will be legally obligated to offer up this information and be transparent about their pay structures.

How Does the Equal Pay Act of California Affect Me?

If you are in any job where you are paid less than a colleague who carries out “substantially similar work,” you may be entitled to equal pay legal compensation. This might include back pay dating from the time of the violation. But it’s also possible that further compensation could be secured in court, particularly if the gender pay disparity was willful on the employer’s part.

How Do I File a Complaint Against My Employer for Equal Pay?

The Labor Commissioner’s Office handles complaints about equal pay in California. Information is also available on the website of the Department of Fair Employment and Housing (DFEH). You can also contact a workplace equality lawyer.

How Do I Know if I Am Being Paid Fairly Under California’s Equal Pay Rules?

Some of the amendments to the Equal Pay Act in recent years provide protections to employees seeking information on pay structures in their workplace. In short, you have the legal right to find out what other colleagues are earning for carrying out the same duties as your own.

Can I Find Out How Much My Colleagues Make in Relation to Me?

Yes. Since the Fair Pay Act was implemented in the mid-2010s, it is now illegal for employers to prohibit discussion of wages (a common tactic of the past) if the purpose is to investigate pay parity and fairness.

Are California Employers Still Exploiting Loopholes in the Equal Pay Act?

Unfortunately, the answer is yes. Some industries, such as the garment industry, have been recently criticized for exploiting loopholes in California employment and wage law. And, as we saw with equal pay lawsuits against Oracle and Riot Games, even slick tech firms are being accused of breaking the law on equal pay.

Does Overtime Count When It Includes Working from Home?

Since the coronavirus pandemic, many Californians have resorted to working remotely. As such, it might be difficult to calculate compensation such as overtime. But the law is clear under the Fair Labor Standards Act: Overtime should be paid when employees exceed eight daily hours, or 40 per week – whether the work is at home or an office.

How Can I Tell If I Am Being Paid Fairly for Equal Work?

Talking about pay can be awkward for some people, and not everyone will want to divulge the information. If you have suspicions about the fairness of your salary, however, you have legal protections if you choose to investigate it further.