Frequently Asked Questions
What state and federal agencies enforce equal pay laws?
In California, the Labor Commissioner’s Office (also known as the Division of Labor Standards Enforcement or DLSE) has the authority to enforce Labor Code Section 1197.5, which prohibits an employer from paying any of its employees at wage rates less than the rates paid to employees of the opposite sex, or of a different race or ethnicity for substantially similar work. California Equal Pay Act
The Department of Fair Employment and Housing (DFEH) enforces the Fair Employment and Housing Act (FEHA), which among other things, precludes the discrimination in employment on the basis of gender, ethnicity, and race. Paying different wages due to an employee’s gender, race, or ethnicity is considered discrimination.
At the federal level, the Equal Employment Opportunity Commission (EEOC) enforces the federal Equal Pay Act and Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act of 1967, and Title I of the American Disabilities Act of 1990, which preclude discrimination in employment, such as unequal compensation, based upon protected classifications.
Does California law require employers to pay all employees who perform the same or substantially similar job the same wage rate?
California law requires equal wages for employees of the opposite sex, or of a different race or ethnicity, who perform the same or substantially similar work. An employer can still adjust wages based on a seniority or merit system, a system that measures earnings by quality or quality of production, or another bona-fide factor that is job related and necessary for the business such as education, training, experience, or the geographical location of the employee and cost of living in that area. Employers may consider conducting a pay equity analysis to determine whether wages should be adjusted within their organization to comply with the law.
Does an employer have to conduct a pay equity analysis of all employees’ wages?
There is no mandate to conduct an audit. However, it may be a good practice for employers wishing to proactively comply with the law. Employers may want to consider conducting any audit with the advice of an attorney or HR professional.
What is the liability an employer can face if there is a wage differential that cannot be explained or justified by one of the recognized or bona fide factors?
An employer could face an enforcement action by one of the above listed state or federal agencies or a civil lawsuit, and may potentially have to pay back wages, liquidated damages, lost work benefits, attorney’s fees, etc. If there is discrimination or retaliation involved, emotional distress and punitive damages may also be assessed.
Can an employee discuss his or her wages with other employees?
Employees can discuss wages with one another, including asking an employee about his or her wages, without discrimination or retaliation by the employer. There is no obligation on any employee to disclose his or her wage or engage in these discussions. Employers can take reasonable measures to protect the privacy of information regarding employees’ compensation, including prohibiting employees who have access or control over confidential wage information given their job duties and responsibilities, from disclosing such information without the consent of those employees. However, employers should be cautious about employees’ rights under the Labor Code to report violations and to assist other employees in exercising their rights to pursue equal pay.
Can an employer ask an applicant about his or her prior salary?
No. California law prohibits all employers from seeking salary history information about an applicant for employment and requires employers to provide the pay scale for a position to an applicant upon reasonable request.
For additional information: Guidance for Employers on Starting Compensation
DISCLAIMER: The materials provided on this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain legal advice about any particular issue or problem. The materials do not represent the opinions or conclusions of individual members of the Task Force. The posting of these materials does not create requirements or mandates.