In 2015, California Governor Jerry Brown signed the California Fair Pay Act, which went into effect on January 1, 2016. The Fair Pay Act amends California’s Equal Pay Act, to strengthen the protections available in the Act, which prohibit gender based wage inequality. It is now the toughest equal pay law in the nation.
The most significant aspect of the Fair Pay Act is that it lowers the standard for comparing wages in order to establish gender based discrimination, by requiring that employers provide equal pay to male and female employees for “substantially similar work, when viewed as a composite of skill, effort, and responsibility” performed under similar working conditions.
For an employer to successfully defend against a claim of unequal pay under the Fair Pay Act, the employer must prove that the pay differential is based on one of four factors: (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production; or (4) a bona fide factor other than sex, such as education, training, or experience. The Fair Pay Act also requires the employer to demonstrate that each factor relied upon is applied reasonably, and that the one or more factors relied upon account for the entire differential.
The Fair Pay Act eliminates the “same establishment” requirement so that employers must now pay men and women the same regardless of their workplace location, assuming the employer has multiple work sites located in different areas.
Under the new law, employers must maintain employee records related to wages, wage rates, job classifications, and other terms and conditions of employment for three years. The Act also expressly prohibits employers from discharging, discriminating or retaliating against any employee for invoking or assisting enforcement of the new law. Available remedies to the aggrieved employee may include reinstatement and reimbursement for such discrimination or retaliation. There is a one-year statute of limitations period to bring such a claim.
The Fair Pay Act also prohibits an employer from preventing its employees from disclosing their own wages, discussing the wages of others, inquiring as to other employees’ wages (although the Act does not require the employer to disclose such information) or assisting another employee in asserting his or her rights under the Act.
Finally, the Fair Pay Act prohibits an employer 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 any other employee to exercise his or her rights under these provisions.
In summary, the new Fair Pay Act makes it easier for employees to establish pay discrimination claims, and more difficult for employers to show that wage differentials are legal. Employees who are not sure if they have been subject to a violation of the Fair Pay Act or gender-based discrimination are encouraged to contact Palay Hefelfinger APC for a consultation.