California Equal Pay Act / Pay Discrimination
California law requires equal pay for substantially similar work, regardless of sex, race, or ethnicity.
California requires equal pay for substantially similar work. Under Labor Code section 1197.5, an employer may not pay an employee less than employees of a different sex, race, or ethnicity for work that is substantially similar when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.
What Substantially Similar Work Means
The comparison is about job content rather than job titles. Two employees can hold different titles, report to different managers, sit in different departments, or work at different locations and still serve as proper comparators. California law does not include the same worksite limitation that applies under the federal Equal Pay Act.
Skill refers to experience, training, education, and ability. Effort refers to physical or mental exertion. Responsibility refers to accountability and the scope of duties assigned. An employee does not have to prove that the employer intended to discriminate. Establishing the disparity for substantially similar work shifts the burden to the employer to justify it.
Case Results
The Employer's Defenses
An employer must account for the entire difference in pay using one or more of the factors the statute allows:
by quantity or quality of production
race, or ethnicity, such as education,
training, or experience
The fourth factor must be job related and consistent with business necessity, and it fails if the employee shows that an alternative practice would serve the same purpose without producing the disparity. Prior salary cannot justify a pay difference, and employers may not ask applicants about salary history.
What Changed in 2026
Effective January 1, 2026, Senate Bill 642 broadened the definitions of wages and wage rates for Equal Pay Act purposes to include equity awards, stock and stock options, bonuses, profit sharing, and certain benefits. Pay comparisons now have to account for total compensation rather than base salary alone, which matters most in industries where equity makes up a significant share of what people earn. The same legislation refined the pay scale disclosure requirement so that employers with 15 or more employees must post a good faith estimate of the compensation they actually expect to pay at hire.
Pay Transparency Rules That Support a Claim
- Employers with 15 or more employees must include a pay scale in job postings
- Employees may request the pay scale for the position they currently hold
- Employers with 100 or more employees file annual pay data reports with the California Civil Rights Department
- Employers must keep job title and wage history records during employment and for three years afterward
- Employers may not prohibit employees from discussing their own wages or the wages of others
These disclosures often provide the first concrete evidence a worker has that a disparity exists. A posting for the position an employee already holds, listing a range above what that employee is paid, is a common starting point for a claim.
Deadlines and Recovery
An Equal Pay Act claim must be brought within two years of the violation, or three years if the violation was willful. Each paycheck reflecting the disparity can count as a separate violation, which affects how far back the claim reaches.
An employee may recover the amount of the underpayment, interest, and an additional equal amount as liquidated damages, along with attorneys’ fees and costs. Relief can cover the entire period during which the violation existed, up to six years.
Claims may be filed with the Labor Commissioner’s Office or brought directly in court. Where the pay disparity also reflects discrimination based on a protected characteristic, a parallel claim under the Fair Employment and Housing Act may be filed with the California Civil Rights Department within three years of the last unlawful act.
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