The gender and racial pay gaps are among the most enduring forms of workplace inequality in America. Despite more than six decades since the enactment of the Equal Pay Act, women—particularly women of color—and non-White employees continue to earn less than men for substantially similar work in almost every industry and job level. For instance, in 2023, the Institute for Women’s Policy Research reported that for every dollar earned by a White man, a typical Latina woman working full-time year-round earned 57.8 cents, a Black woman earned 66.5 cents, a White woman earned 79.6 cents, and an Asian woman earned 94.2 cents. This pay discrimination based on gender and race not only harms individual workers but also undermines families, hampers economic growth, and perpetuates systemic inequality that affects future generations.

If you are experiencing pay disparities, witnessing workplace discrimination, or looking to understand your legal options, the Pay Discrimination Attorneys at Helmer Friedman LLP can help you navigate the complex landscape of discrimination law and ensure that your rights are protected.

Equal Pay Laws

The struggle for equal pay in America has a deep labor history. Before 1963, women were often paid less than men for the same work due to outdated beliefs about gender roles. They were also excluded from higher-paying positions, forced into lower-paying “women’s work.”

The United States’ Equal Pay Act of 1963 emerged from years of advocacy by labor unions and women’s rights groups, establishing that employers must pay equal wages for equal work, regardless of sex. This law, strengthened by Title VII of the Civil Rights Act of 1964, which prohibited employment discrimination based on sex, race, and other factors, created a framework for addressing workplace discrimination.


Broader than the U.S. Equal Pay Act, the California Equal Pay Act, which was initially passed in 1949 and amended several times since, prohibits employers not only from paying employees of one sex less than employees of the opposite sex for the same work but also from paying employees of one race/ethnicity less than employees of another race/ethnicity for the same work.

Understanding Today’s Legal Framework

The current legal framework addressing pay discrimination includes various federal and state laws, along with enforcement mechanisms designed to protect workers’ rights. California’s Equal Pay Act prohibits employers from paying any employee a wage rate that is less than what they pay employees of the opposite sex, or a different race or ethnicity, for “substantially similar work.” This is defined as work that is similar in skill, effort, and responsibility, and performed under similar working conditions.

Under California’s Equal Pay Act, “substantially similar work” means work that is alike primarily in terms of skill, effort, and responsibility, and is performed under similar working conditions. The term “skill” refers to the experience, ability, education, and training required to perform the job. “Effort” pertains to the amount of physical or mental exertion needed to complete the work, while “responsibility” relates to the level of accountability or duties required. “Working conditions” encompass the physical environment, including factors such as temperature, fumes, ventilation, and hazards.

An employer can defend against a claim under the California Equal Pay Act by demonstrating that any pay differences for substantially similar work are based on:

  • Seniority
  • Merit
  • A system that measures production
  • A bona fide factor other than sex, race, or ethnicity

Additionally, the employer must prove that the above factors are applied reasonably and account for the entire difference in wages. Under California’s Equal Pay Act, employers cannot justify pay differences between employees of the opposite sex or different races or ethnicities based on an employee’s prior salary. While an employer may consider a current employee’s existing salary when making compensation decisions, any resulting wage differences must be justified by one or more of the aforementioned factors.

An employer may defeat a California Equal Pay Act claim by proving that the wage differential is due to a bona fide factor other than sex, race, or ethnicity, but to succeed on this defense, the employer must also prove that the factor is:

  • Not based on or derived from a gender-, race-, or ethnicity- based factor
  • Job-related

Examples of a “bona fide factor other than sex, race, or ethnicity” may include:

  • Education
  • Training
  • Experience

 

Title VII of the Civil Rights Act offers broader protection against sex discrimination in employment. This law covers not only pay but also hiring, promotion, and other terms and conditions of employment.

Common Forms of Pay Discrimination

Gender pay discrimination appears in various forms, some of which are more apparent than others. Direct wage disparities for identical positions are the most straightforward violations. However, discrimination often arises from more subtle mechanisms that can be just as harmful to workers’ economic interests.

Job segregation is a significant issue, where employers direct women and men into different roles with artificially created distinctions that justify pay differences. This practice violates equal pay principles when the positions require substantially similar skills, effort, and responsibilities, regardless of different job titles or superficial distinctions.

Using salary history to determine wages perpetuates the gender and racial pay gap. In response, California enacted Labor Code Section 432.5 to prevent this practice. This code establishes several key provisions:

  • Employers cannot rely on an applicant’s salary history when deciding whether to offer employment or determining the salary offer.
  • Employers are prohibited from seeking salary history information—either orally or in writing—about job applicants, including their compensation and benefits.
  • Upon reasonable request, employers must provide the pay scale for a position to the job applicant.
  • Employers must provide current employees with the pay scale for their position upon request
  • Employers with 15 or more employees must include the pay scale in any job postings.
  • If an employer with 15 or more employees engages a third party to post or publish a job listing, they must provide the pay scale to that third party for inclusion in the job posting.

Pay transparency restrictions create another barrier to identifying discrimination. When employers prohibit employees from discussing their compensation, workers cannot easily determine if pay disparities exist. To tackle this issue, California has implemented several laws:

  • California Labor Code § 232: This code explicitly states that employers cannot prohibit employees from disclosing, discussing, or inquiring about their own wages or the wages of others. Employers are also forbidden from requiring employees to sign waivers denying these rights or from retaliating against employees for engaging in these discussions.
  • California Equal Pay Act (Labor Code § 1197.5): This act strengthens protections for employees who discuss wages by explicitly prohibiting employers from forbidding such discussions or retaliating against employees for disclosing their wages, discussing the wages of others, or inquiring about another employee’s wages. Its goal is to ensure equal pay for substantially similar work, irrespective of sex, race, or ethnicity.

Successful Enforcement Examples and High-Profile Settlements

Recent enforcement actions by the and settlements demonstrate both the prevalence of gender pay discrimination and the effectiveness of legal remedies in addressing violations. These cases, while the parties were not represented by Helmer Friedman LLP, they provide important precedents and show the real-world impact of successful advocacy.

  • Google’s $28 Million Settlement:

    The tech giant settled a California equal pay lawsuit after a leaked internal spreadsheet revealed systematic pay disparities affecting Hispanic, Latinx, Indigenous, Native American, American Indian, Native Hawaiian, Pacific Islander, and Alaska Native employees. The settlement required comprehensive pay equity reviews and policy changes beyond the monetary relief.

  • Activision Blizzard’s $54.8 Million Resolution:

    The gaming company agreed to pay approximately $54.8 million to resolve claims of unequal pay and sex-based discrimination affecting female employees in California. The settlement included requirements for independent consultants to review compensation policies and ongoing diversity efforts.

  • Disney’s $43.25 Million Agreement:

    The entertainment company settled a gender pay discrimination class action, committing to conduct pay equity analyses and retain consultants for training. The case highlighted how enterprise-wide compensation policies can perpetuate historical discrimination.

  • U.S. Soccer Federation’s $24 Million Commitment:

    Following years of litigation, the USSF settled with the United States Women’s National Team for $24 million, committing to equal pay for both men’s and women’s national teams going forward. Including the following
    salary history and pay transparency regulations:

    • (a) An employer shall not use an applicant’s salary history as a factor in deciding whether to offer employment or what salary to offer the applicant.
    • (b) An employer shall not, either orally or in writing, personally or through an agent, seek salary history information about an applicant for employment, including their compensation and benefits.
    • (c)(1) Upon reasonable request, an employer shall provide the pay scale for a position to an applicant who is applying for employment.
    • (2) An employer shall also provide an employee with the pay scale for the position they currently hold upon request.
    • (3) Employers with 15 or more employees must include the pay scale for a position in any job posting.
    • (4) An employer shall maintain records of job titles and wage rates for each employee throughout their employment and for three years after employment ends, to aid the Labor Commissioner in determining if there is a pattern of wage discrepancies. These records must be available for inspection by the Labor Commissioner.
    • (5) Employers with 15 or more employees that hire a third party to announce, post, publish, or disseminate a job posting must provide that third party with the pay scale, which must be included in the job posting.

  • Mastercard’s $26 Million Settlement:

    The financial services company agreed to pay $26 million in a proposed class action while committing to conduct annual pay equity audits and evaluate its career ecosystem for bias.

These settlements share common elements: clear evidence of systematic pay disparities. They demonstrate that violations carry real financial consequences while creating precedents that benefit broader groups of workers.

If you have experienced pay discrimination or have knowledge of unfair pay practices in your workplace, the Pay Discrimination Attorneys of Helmer Friedman LLP are here to help.