California’s New Equal Pay Protections: 5 Must-Knows for Employers
On October 6, 2015, California Governor Jerry Brown signed the California Fair Pay Act, which has been called the “strongest equal pay law in the nation.” The Act applies to employers with employees in California and becomes effective on January 1, 2016. Here are five main points about the Act that every employer should know:
Equal pay laws already exist in California and at the federal level; this newly passed Act expands California’s existing equal pay law and goes further than federal law by placing the affirmative burden on employers to justify the entirety of gender pay disparities 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; and/or
A bona fide factor other than sex, such as education, training or experience, that is job-related and consistent with an overriding legitimate business purpose.
The Act permits employees alleging discriminatory pay discrepancies to make comparisons with employees who work at different locations for the same company and who perform “substantially similar work, when viewed as a composite of skill, effort, and responsibility” instead of the “same” or “equal” work.
The Act requires employers to maintain records of wages and wage rates, job classifications, and other terms and conditions of employment for a minimum of three (3) years.
The Act prohibits employers from forbidding employees from disclosing their own wages, discussing the wages of others, inquiring about other employees’ wages, or aiding or encouraging other employees to exercise their rights under the Act.
The Act allows employees to bring civil actions against employers within one year of being discharged, discriminated, or retaliated against for engaging in any conduct protected by the Act.
In light of this new law, Shivani Sutaria Law Offices will be working with employers to analyze the pay of their entire workforce and determine if disparities between men and women are due to one or more of the permitted factors. If those permitted factors don’t fully explain the disparities, we will recommend proactive steps that can be taken to ensure fair pay and reduce legal exposure. Contact us at shivani@sutaria-law.com or 408/406-8208.
