The California Equal Pay Law prohibits discrimination in compensation based on a person's sex in jobs requiring equal skill, effort, and responsibility that are performed under similar working conditions in the same establishment (CA Lab. Code Sec. 1197.5). The law applies to all employers, regardless of size.
Effective January 1, 2016, the law prohibits discrimination in compensation based on a person's sex for substantially similar work when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions. Because the amended law also removes the “same establishment” language, any pay differential must be examined across the employer’s business as a whole, regardless of location.
Retaliation prohibited. It is unlawful for an employer to retaliate or otherwise discriminate against an employee who has taken any action to exercise his or her rights under the law, or who has assisted in any manner to enforce the law.
Differences in pay are permissible if they result from:
• A system that measures quantity or quality of production; or
• A bona fide factor other than sex. Effective January 1, 2016, this factor applies only if the employer shows it is not based on a sex-based differential in compensation, is job-related, and is consistent with a business necessity (i.e., an overriding legitimate business purpose for which there is no alternative business practice that would serve the same purpose without producing the wage differential).
Each factor must be applied reasonably, and the factors relied on by the employer must account for the entire wage differential.