The Equal Pay Act bars wage discrimination for substantially similar work and protects workers facing unequal pay, retaliation, and hiring bias. This article outlines federal and California pay rules, employer defenses, filing deadlines, damages, and legal rights for employees and applicants.
By Brad Nakase, Attorney
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Individuals performing identical jobs should be paid equally. The Equal Pay concept is commonly referenced in relation to the gender pay gap & gender discrimination. Equal pay must be available for the whole range of benefits and remuneration, including the basic salary, non-salary benefits, bonuses, and allowances.
The California Fair Pay Act and the Federal Equal Pay Act both have a number of important provisions that reduce an employer’s capacity to discriminate when determining employee pay rates and admirably promote employee rights.
Workers of all genders who accomplish “substantially identical work when evaluated as a composite of talent, effort, and responsibility” must be paid equally under the Equal Pay Act.
There exist two Equal Pay Acts. The California Equal Pay Act and the Equal Pay Act, according to Federal Law. The laws under the Equal Pay Act are the same. Both the federal government & the state of California demonstrate a solid public policy in favor of employees within the Equal Pay Act.
Employers are required by the Equal Pay Act to pay all employees equally, regardless of their gender, color, sexual orientation, sexual identity, transgender status, or gay or lesbian status. The laws are Labor Code section 432.3 and California Labor Code 1197.5.
For many years, the California Equal Pay Act (sometimes known as “Equal Pay Acts”) has been in effect. This law has made sure that workers are compensated fairly for doing the same work. This holds true irrespective of their gender. California Fair Pay Act strengthened this provision in 2015.
The California Equal Pay Act has resulted in a number of changes.
The Equal Pay Act prohibits employers from paying employees of a different sex at a lower rate. This is also true for individuals belonging to different races & ethnicities. The only exception is that the jobs need to be very similar. Finding specific work can be challenging at times. An equivalent competence or duty can be employed as a metric in that situation.
Related: Equal Pay Act Cases and Settlements: Lawsuits, Employee Rights, and Affected Industries
The federal regulations state that the phrase “wage rate” refers to all types of pay, regardless of how they are determined—by time, piece, commission, work incentive, bonus, profit-sharing, or any other method. The rate at which a draw, guarantee, or advance is paid against a commission settlement is included in the term, along with overtime compensation.
The California Equal Pay Act uses wage rates to assess whether compensation is equal. This is just like the federal Equal Pay Act. The phrase “wage rate” is not defined under the California Equal Pay Act.
The following are a few instances of wages within the California and federal Equal Pay Acts:
Furthermore, within the Equal Pay Acts, stock options could be considered a type of compensation.
For “equal work in similar working conditions,” which is defined as employment requiring equal ability, effort, and responsibility, the federal equivalent Pay Act forbids paying differing compensation rates based on sex. According to the federal standards, “equal work” is defined by the actual job requirements rather than the job title.
For a job to be considered “equal work,” it simply needs to be “substantially equal.” To achieve this, the plaintiff must demonstrate that the jobs under comparison share a basic set of duties and that any extra duties that are present in one position but not in another do not significantly alter the jobs.
The federal regulations state that “the jobs must be conducted under comparable conditions of employment for the equal pay criteria to apply.” The phrase “similar working conditions” refers to two things: (1) environments that an employee frequently encounters, including their impact and regularity; and (2) dangers, which include the physical risks that an employee frequently faces.
It is important to remember that minor or insignificant variations in working conditions—which are typically ignored by employers—would not support a salary disparity. The federal Equal Pay Act also mandates that an employee’s equal labor must be done at the same establishment & under comparable working conditions.
The task at hand is substantially similar if the abilities, effort, & responsibilities needed to do the task are largely the same. Compared to the federal Equal Pay Act, this requirement is significantly more expansive and adaptable. This benchmark can be further dissected by contrasting the requirements of the work in terms of:
What is required to complete the task is the question when comparing skills. Neither the federal Equal Pay Act nor the California Equal Pay Act allows for the justification of differential compensation if particular abilities, efforts, or duties are not required for a particular position. It makes no difference if the higher-wage employee has a higher degree than the lower-wage employee if an advanced degree is not necessary to execute the work.
When the environmental surroundings—such as the temperature, ventilation, fumes, or any hazards—are identical, work is done under similar working conditions. Unlike the federal Equal Pay Act, the California Equal Pay Act permits an employee to file a claim even in cases when there is a wage gap between workers at different locations. Employee claims of pay discrimination are now easier to prove.
There are four ways for companies to avoid being held liable for wage discrimination under the federal Equal Pay Act. The federal exceptions are far more expansive compared to the exceptions under the California Equal Pay Act. They make it easier for firms to qualify. Employers are only allowed to pay different compensation rates under the federal Equal Pay Act. They must show that the salary discrepancy is based on some factors.
The Ninth Circuit stressed that employers must prove that job-related variables, not sex, are the cause of wage inequalities in order to qualify for the fourth exemption, which is “any other aspect other than sex.”
Employers are allowed to pay various wage rates under the California Equal Pay Act. They must show that the wage difference is founded on:
A bona fide reason other than sex, race, & ethnicity may only be used by an employer to justify a wage discrepancy if:
In California, a pay gap cannot be justified by an employer using the employee’s prior salary. However, if any resultant compensation discrepancy is supported by at least one of the expressly allowed reasons, the employer may decide to base the wage determination on the employee’s present salary.
Lastly, if an employer depends on any of the above-mentioned acceptable variables, they must demonstrate that they applied those elements in a reasonable manner and that they account for the full difference.
Rather than considering the employer’s intentions, equal pay laws evaluate pay discrimination primarily on the presence of salary inequalities. To put it another way, an employee does not have to provide evidence that their sex, race, or ethnicity caused them to be paid less. In order to prove a violation, discriminatory intent is not necessary. If there is a wage difference between a worker and another worker who meets the above criteria, such a difference is sufficient.
Furthermore, the California Equal Pay Act mandates that employers keep records of every worker’s employment conditions, including wages, rates of pay, and job classifications, on file for a minimum of three years.
The federal Equal Pay Act does not specifically provide protection for job applicants. However, job seekers are protected in a few significant areas by the California Equal Pay Act, whereas employees are granted the majority of the benefits. All job seekers who are not yet employed by the company in any capacity are covered by these protections.
These regulations, like those covered in earlier parts, are applicable to all employers, both public & private. In particular, an employer:
However, a company may:
An employee may submit an administrative claim to the EEOC (Equal Employment Opportunity Commission) under the federal Equal Pay Act regarding allegations pertaining to federal law. After that point, the EEOC would look into the matter and possibly take it to court on the employee’s behalf.
The EEOC can oversee the reimbursement of wages and any interest owed if the administrative complaint is successful. When an employee files a claim with the EEOC, they are barred from pursuing a private lawsuit on their own behalf unless the EEOC subsequently dismisses the action. An employee may launch an individual suit against their employer in court rather than filing an EEOC claim.
An employee may file a private lawsuit against their employer in a tribunal of competent jurisdiction without first exhausting administrative procedures under the federal Equal Pay Act.
A worker impacted by a retaliation action or an equal pay violation may also pursue a private lawsuit or an administrative claim within the California Equal Pay Act. The DLSE (Division of Labor Standards Enforcement) is the state administrative agency that looks into and pursues allegations made by employees under the California Equal Pay Act. A disgruntled employee may also bring a private civil lawsuit without using up all administrative options.
However, unless the DLSE rejects the complaint of the worker without prejudice, a disgruntled employee who agrees to administrative action forfeits their right to file a private lawsuit. The employee may take an independent case or engage if the DLSE fails to resolve the employee’s case within 180 days of the employee filing the complaint.
An equal pay or retaliation claim must be filed by the claimant/employee within a specific time frame (referred to as the statute of limitations) following the infraction.
The duration of the filing deadline for federal equal pay claims is contingent upon the intentionality of the employer’s violation. A claimant has two years to bring a lawsuit in a court with the necessary jurisdiction. Regardless of whether they filed an administrative complaint, a claimant has three years from the date of the claimed federal Equal Pay Act infringement if the violation was deliberate.
The duration of the time limit for California claims for equal pay also relies on whether the company intentionally violated the law. For intentional violations, the claim filing period is three years; for non-willful violations, it is two years. The alleged infraction date is used to calculate the time restriction. Every paycheck that shows unequal compensation could be regarded as a violation. On the day of every such paycheck, the clock starts to run. An employee gets one year from the time of the retaliatory action to submit a claim according to the California Equal Pay Act.
The Federal Equal Pay Act allows an employee to get:
An employee may receive “such equitable or legal redress as may be warranted” according to the Federal Equal Pay Act if they are fired or subjected to other forms of retaliation for trying to uphold the equal pay standards. This includes reinstatement, employment, promotion, lost wages, etc.
The California Equal Pay Act allows an employee to get:
According to either federal or state law (whichever leads to the larger recovery amount), but not both, an employee has the right to this recovery even if they consented to work for the lower wage amount in question.
Additionally, an employee who prevails in a retaliation action may be entitled to the following benefits under the California Equal Pay Act:
Reinstatement, back pay (which includes lost income and any perks the worker would have earned), plus interest, and, in some cases, an equitable remedy.
An employer (or individual) that intentionally breaches the California Equal Pay Act may be found responsible for a misdemeanor in conjunction with the civil penalties and other payments mentioned above. The California Equal Pay Act does not impose criminal penalties on public employers. Reducing the compensation of a higher-paid worker in an effort to comply with equal pay rules or participating in unfair pay practices are two examples of violations.
An employer (or individual) who knowingly breaches the California Equal Pay Act faces a felony punishment of a maximum of ten thousand dollars and, in the case of recurrent crimes, up to six months in jail if prosecuted and found guilty.
Class-action lawsuits are filed by one or more workers on behalf of a greater number of workers in similar circumstances. When multiple employees wish to file comparable assertions against their employer, they usually file a class-action lawsuit. This kind of lawsuit avoids the difficulty of including every employee in a single case and the possibility of inconsistent verdicts in different lawsuits. It only takes one employee to bring a class-action lawsuit as the representative of the class.
A class-action lawsuit may be launched in a state or federal court, depending on the circumstances. In this capacity, the class representative is required to work for the benefit of the other employees who have been harmed by the employer’s breach of the California or federal Equal Pay Acts.
Affected workers may make civil claims for harm against their employer or employers under the federal Equal Pay Act and the California Equal Pay Act. Employees who are impacted may decide to submit these legal claims on their own accord or as a class action for the benefit of other impacted employees who are in similar circumstances.
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