Tag Archives: California Equal Pay Act

NEW GUIDANCE: California Pay Equity Task Force Issues Guidelines for Complying with the California Equal Pay Act

In January 2016, SB 358, the amended version of the California Equal Pay Act, took effect. The California Equal Pay Act requires all California employers pay the same wage to employees who perform “substantially similar work” the same wage regardless of gender, ethnicity or race.   Under this law, employers are also required to provide an applicant with a pay scale for a position following a “reasonable request.”  Finally, it prohibits employers from requesting an applicant’s prior salary history and from relying on an applicant’s salary history alone to justify a disparity in compensation “based on sex, race or ethnicity.”

Following the effective date of the amended California Equal Pay Act, the California Commission on the Status of Women and Girls launched a Pay Equity Task Force tasked with the responsibility of monitoring the implementation of the new law.  Recently, this task force issued written guidance for employees, employers and unions on how they may comply with the California Equal Pay Act. Continue reading NEW GUIDANCE: California Pay Equity Task Force Issues Guidelines for Complying with the California Equal Pay Act

NEW LAW: California Clarifies Salary History Ban

On July 18, 2019, California Governor Jerry Brown signed Assembly Bill 2282.  This bill, which goes into effect on January 1, 2019, amends California’s salary history ban law and attempts to clarify certain provisions of that law.  It also clarifies the California Equal Pay Act.

First, the new law defines the following terms:

  • “Applicant” or “applicant for employment”:  An individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.
  • “Pay scale”: A salary or hourly wage range.
  • “Reasonable request”: A request made after an applicant has completed an initial interview with the employer.

Continue reading NEW LAW: California Clarifies Salary History Ban

California’s Equal Pay Law Expanded

On September 30, 2016, California Governor Jerry Brown signed Senate Bill 1063 (the Wage and Equality Act of 2016) into law. This bill prohibits employers from paying employees of one race or ethnicity a lower wage than employees of different races or ethnicities.

Specifically, the Wage and Equality Act of 2016 amends California Labor Code section 1197.5 and extends the equal pay protections to race- and ethnicity-based pay differentials. Under the new law, a pay differential between workers of different races or ethnicities is permitted only if it is based on a reasonably applied factor that is based on

  1. a seniority system;
  2. a merit system;
  3. a system that measures earning by quantity or quality of production; or
  4. a bona fide factor other than race or ethnicity.

Effect on California employers

The new law goes into effect on January 1, 2017. Before that time, it is recommended that California employers perform a pay equity analysis and verify that all workers are receiving equal payment for equal work. Prior to performing a pay equity analysis, it is important to review the DLSE’s California Equal Pay Act: Frequently Asked Questions and the provisions of the California Equal Pay Act. Remember, the pay equity analysis is a fact-specific analysis that must be performed on a case by case basis. You are strongly encouraged to consult with an HR Professional or qualified legal counsel for assistance in performing this analysis.

DLSE Sheds Some Light On California’s Equal Pay Act

Are you confused about the recent amendments that were made to the California Equal Pay Act? Some clarity is now available.

Under the California Equal Pay Act, employers are required to pay employees of both sexes the same “wage rates” for “substantially similar work,” unless the employer proves that the wage differential is based on

  1. Seniority,
  2. Merit,
  3. A system that measures earnings by quantity or quality of production, or
  4. Some other bona fide factor other than sex, such as education, training or experience.

Sensing confusion on the part of California employers, the Department of Labor Standards Enforcement (“DLSE”) has released Frequently Asked Questions regarding the California Equal Pay Act (entitled “California Equal Pay Act: Frequently Asked Questions”). While the main focus of the new FAQs is providing an overview of the new law, the FAQs also define two key terms, which will assist employers in performing a pay equity analysis.

As stated above, under the California Equal Pay Act, employers are required to pay employees the same wages for “substantially similar work” – regardless of the employee’s gender. Yet, the statute left the phrases “substantially similar work” and “working conditions” undefined. The new FAQs define these terms.

According to the FAQs, “Substantially similar work” refers to work that is mostly similar in skill, effort, responsibility, and performed under similar working conditions.

  • Skill refers to the experience, ability, education, and training required to perform the job.
  • Effort refers to the amount of physical or mental exertion needed to perform the job.
  • Responsibility refers to the degree of accountability or duties required in performing the job.

Working conditions means the physical surroundings (temperature, fumes, ventilation) and hazards.

Finally, the FAQs remind employers that an employer may not prohibit an employee from:

  • disclosing his or her own wages,
  • discussing the wages of others,
  • inquiring about another employee’s wages, or
  • aiding or encouraging any other employee to exercise rights under the Equal Pay Act.

In addition, an employer may not retaliate against an employee for engaging in such conduct.

Take home for employers

Prior to performing a pay equity analysis, it is important to review the DLSE’s FAQs and the provisions of the California Equal Pay Act. Remember, the pay equity analysis is a fact-specific analysis that must be performed on a case by case basis. You are strongly encouraged to consult with an HR Professional or qualified legal counsel for assistance in performing this analysis.

California Revamps Its Equal Pay Law

“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:

  1. A seniority system
  2. A merit system
  3. A system that measures earning by quantity or quality of production
  4. 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.