“Equal pay for equal work” has been the law of the land in California since 1949, when California Labor Code section 1197.5 was enacted prohibiting discrimination in pay based on a worker’s gender.
However, despite this long-standing law, the California legislature found that there continued to be a significant gender wage gap in California (measured at 16 cents on the dollar in 2014, which amounted to a loss of more than $33 billion each year for women working full time in California). In order to address the continuing gender wage gap, the California legislature passed and, on October 6, 2015, California Governor Jerry Brown signed Senate Bill 358 (the California Fair Pay Act) into law.
The most significant aspect of the Fair Pay Act is that it lessens an employee’s burden of proof in a unequal pay claim. Under the old law, the employee was required to provide that he/she received lower wages than an employee of a different gender for equal work. Under the Fair Pay Act, the employee only needs to prove that he/she received lower wages for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” Under the new law, the employee does not have to be performing the same job in order to make a viable claim.
The Fair Pay Act also clarifies that a “wage differential” will only be justifiable if the employer can prove that the wage differential is based on one or more of the following factors:
- A seniority system
- A merit system
- A system that measures earning by quantity or quality of production
- A bona fide factor other than sex, such as education, training, or experience
In addition, the Fair Pay Act also requires that employers “maintain records of the wages and wage rates, job classifications, and other terms and conditions of employment of the persons employed by the employer” for a period of three years.
Finally, the Fair Pay Act expressly forbids employers from prohibiting “an employee from disclosing the employee’s own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging” other employees to exercise their rights under the new law. The law further prohibits employers from retaliating against any employee for exercising any of their rights under the new law.
The new law goes into effect on January 1, 2016. Prior to that date, employers should review their pay policies to ensure that their policies are in compliance with all aspects of the new law. In addition, employers should be prepared to receive more questions from employees about their wages.