The California Equal Pay Act requires equal pay for employees who perform “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”
The Fair Pay Act and Equal Pay Act are intended to reduce the disparity in how men and women are compensated for performing similar jobs. An employer cannot pay men and women different salaries for similar work, except where the employer can demonstrate the wage differential is based on one or more of the following factors:
- A seniority system.
- A merit system.
- A system that measures earnings by quantity or quality of production.
- A bona fide factor other than sex, such as education, training, or experience.
The employer must demonstrate that the bona fide factor is not based on or derived from a sex-based differential in compensation, is job-related with respect to the position in question, and is consistent with a business necessity. A “business necessity” is “an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve.”
Even if the employer demonstrates that a bona fide factor other than sex was used to differentiate compensation, the defense does not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without the wage inequality.
The Fair Pay Act provides similar protections to employees of another race or ethnicity.
Employers who violate the Equal Pay Act are liable to employees for unpaid wages and interest. In addition, the employee may be able to recover an additional equal amount as liquidated damages.