174 | 2024 Cal-Peculiarities ©2024 Seyfarth Shaw LLP www.seyfarth.com California, unlike federal law, has removed statutory exemptions that applied where work was performed “at different geographic locations” and “on different shifts or at different times of day.” Nonetheless, employers may still justify pay differences based on geographic location, shift, or hours differentials, as a bona fide factor other than sex.226 Expansion beyond gender. In 2016, the Legislature doubled down on the Equal Pay Act, extending California’s pay equity provisions beyond gender differentials to differentials among employees of different races or ethnicities.227 Ban on use of prior salary as sole basis to defend pay disparity. A 2015 amendment provided that employers must not use prior salary as the “sole” basis to justify a pay disparity.228 In 2018 the Legislature tightened this restriction, providing that prior salary cannot be used to justify any disparity in compensation.229 While employers still may cite rightfully obtained prior salary information, employers cannot rely on differences in prior pay to justify ongoing pay differences between substantially equal employees.230 Anti-secrecy provision. The Equal Pay Act, duplicating law found elsewhere, forbids employers from prohibiting employees from disclosing or discussing their own wages or the wages of others, or from aiding or encouraging other employees to exercise their rights under the law.231 These anti-pay secrecy requirements echo similar prohibitions emanating from the National Labor Relations Act, the California Labor Code, and an Executive Order that applies to federal contractors. Methods of enforcement. The DLSE can enforce the Equal Pay Act, and employees can sue directly in court— within two years from the date of the violation (or three if the violation was “willful”)—to recover the balance of wages, interest, liquidated damages, costs, and reasonable attorney fees.232 Employees also may file complaints with the DLSE alleging employer violations of the prohibitions on discrimination, retaliation, and restricting employee wage-information discussions.233 The Equal Pay Act law provides an additional private right of action— with a one-year statute of limitations—for employees claiming they have been discharged, discriminated, or retaliated against for engaging in any conduct protected by the statute.234 These employees may seek reinstatement and reimbursement for lost wages and benefits, interest, and “appropriate equitable relief.”235 Recordkeeping requirements. The Equal Pay Act has extended—from two years to three—an employer’s obligation to maintain records of wages and pay rates, job classifications, and other terms of employment.236 Ban on inquiries about applicant’s prior salary. In 2017 California joined several other U.S. jurisdictions, including San Francisco,237 in forbidding employer inquiries into applicants’ salary history information.238 Labor Code section 432.3 forbids employers to seek information about an applicant’s “compensation and benefits.”239 Under section 432.3, employers must not ask about salary history information and must not rely on it in deciding whether to offer a job or how much to pay. Nonetheless, the law also states that employers may consider this information in setting salary if an applicant volunteers that information.240 That said, because California precludes employers from relying on prior salary to justify any gender, ethnicity, or race-based disparity in pay, employers should proceed with caution in utilizing prior salary.241 Required pay scale disclosure. Legislation enacted in 2017 made California the nation’s first jurisdiction to require that employers provide applicants with pay scales: “An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.”242 This seemingly simple provision generated important compliance issues, as the key terms—"applicant,” “pay scale,” and “reasonable request”— were undefined.
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