California Equal Pay Act’s ‘Substantially Similar’ Standard Follows Federal Law

By Joanne Deschenaux September 9, 2021
Scales of Justice weighing money with law books and gavel in background

A 2016 amendment to the California Equal Pay Act (EPA) did not change what a worker must show to prove a violation, a California appeals court ruled. The standard prior to the amendment was consistent with the federal standard and remains consistent after the amendment, the court said.

The plaintiff in this case, who brought a claim under California law, still must show that she is being paid lower wages than a male comparator and also that she is performing work substantially equal in skill, effort and responsibility under similar working conditions, the state appeals court concluded.

The plaintiff was employed by the defendant for 11 months as the associate general counsel. She complained on numerous occasions about her pay, claiming she should be paid as much as a vice president. The company ultimately fired her, citing performance deficiencies as the reason, and she sued, claiming a violation of the California EPA.

Amendment to California EPA

Under the California EPA, an employer cannot pay anyone less than the rates paid to employees of the opposite sex (or another race or ethnicity) for substantially similar work performed under similar working conditions, while taking into account the individual's skill, effort and responsibility. Exceptions may apply if the employer demonstrates that the wage differential is based on at least one 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 (or race or ethnicity), such as education, training or experience.

The EPA aims to ensure that employees performing equal work are paid equal wages without regard to gender, race or ethnicity, the court noted. To prove a violation, a plaintiff must establish that, based on one of the protected factors, the employer pays different wages to employees doing substantially similar work under substantially similar conditions. If the plaintiff makes that showing, the employer then must prove that the disparity is permitted by one of the EPA's statutory exceptions.

If an exception is established, the burden shifts back to the plaintiff to prove there's a different reason for the discrepancy. There is no requirement for a plaintiff to show discriminatory intent as an element of the claim, the court explained.  

Prior to the 2016 amendment, the California law had referred to "equal" work, as does the federal law. The amendment substituted the phrase "substantially similar work."

The plaintiff claimed that the 2016 amendment to California's EPA imposed more rigorous standards for employers than the standards under the federal EPA, and the trial court therefore erred in relying on federal authorities in dismissing her claims before trial.  

The federal statute provides that no employer may pay employees less than the rate paid to employees of the opposite sex for equal work that requires equal skill, effort and responsibility that is performed under similar working conditions. Exceptions are based on the same four factors listed in the state law.

Although the federal statute uses the phrase "equal skill, effort and responsibility," cases applying the statute have explained that although a plaintiff need not show that the jobs are identical, she must demonstrate that she performed substantially similar work for less pay.

And whether the work is "substantially similar" is determined by whether the job required substantially similar skill, effort and responsibilities, and was performed under similar working conditions, the court said.

California cases decided prior to the 2016 amendment generally relied on the federal courts' interpretation of the federal EPA. The state's amended standard, the court noted, is very close to that applied by courts under the federal EPA. In fact, the court said, the legislative history of the 2016 amendment explains that the purpose of the amendment was to bring the section in line with case law under the federal EPA.

The court therefore rejected the plaintiff's claim that the trial court had applied the wrong standard in evaluating her claim and dismissing it before trial.

The plaintiff identified two employees, the general counsel to whom she reported and the vice president of law and policy, as comparators whose compensation exceeded hers. She asserted they did not share her status as a female of Asian heritage.

The trial court concluded that the plaintiff's job duties were not substantially similar to either of the comparators who each had greater responsibility for formulating policy and supervising other employees.

The appellate court agreed—concluding that both comparators had greater and substantially different responsibilities than the plaintiff—and affirmed the trial court's decision dismissing the plaintiff's claim before trial.           

Pak v. Github Inc., Calif. Ct. App., No. A159585 (Aug. 18, 2021).

Professional Pointer: One notable difference that does exist between California's EPA and the federal law is that the state law prohibits pay differentials based on race and ethnicity in addition to gender, while the federal law addresses only gender-related pay disparities.

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.

[Want to learn more about California employment law? Join us at the SHRM Annual Conference & Expo 2021, taking place Sept. 9-12 in Las Vegas and virtually.]



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