California Fair Pay Act Expands State Law Against Pay Inequality

The California Equal Pay Act prohibits employers from paying men and women differently for equal work.  On October 6, 2015, Governor Jerry Brown signed the California Fair Pay Act, which expanded and strengthened the Equal Pay Act in several respects.  Under the California Fair Pay Act, employers are required to pay men and women equally for “substantially similar work” rather than merely “equal work.”  “Substantially similar work” refers to work that is similar in skills, effort, and responsibility, and performed under similar working conditions.

Prior to the signing of this bill, many employers relied on the notion of “equal pay for equal work” to justify disparities in pay.  Now, courts and employees can look to various factors to determine if the work men and women are performing is substantially similar when evaluating pay disparity claims including:  experience, education, training required to perform the job, mental or physical exertion needed to perform the job, and workplace hazards and environment.  Employees can also compare wages of other workers who perform similar work even if, for example, their job titles are different, to argue that they are entitled to equal pay.

Before the California Fair Pay Act was passed, the Equal Pay Act prohibited employers to pay members of the opposite sex less for equal work performed at the same establishment.  Now, comparisons can be drawn from any of the employer’s locations to show pay disparity.

The bill also explicitly provides that retaliation against employees who seek to enforce the law is illegal.  Employers cannot forbid employees from discussing or inquiring about their wages or the wages of others.

The California Fair Pay Act went into effect on January 1, 2016.

On September 30, 2016, Governor Brown signed into law two more bills, A.B. 1676 and S.B. 1063, addressing ongoing concerns about pay inequity.  Both bills go into effect on January 1, 2017.

A.B. 1676 amends the California Fair Pay Act by prohibiting employers from relying on an employee’s prior salary to justify salary gaps amongst similarly situated employees.  The Legislature was concerned that employers used salary history as a basis for current salary.  This approach could unfairly affect women candidates who may have been absent from the workforce, or who are unfairly affected by the gender pay gap.

S.B. 1063 expands the Fair Pay Act by extending protections to employees on the basis of race and ethnicity.  The language of S.B. 1063 mirrors the gender-related provisions of the California Fair Pay Act, and prohibits employers from paying “employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”

If you feel that your employer pays you less on account of your gender, race or ethnicity, please feel free to call Hunter Pyle Law for a free consultation at (510)-663-9240 or inquire@hunterpylelaw.com.