“Equal pay for equal work” is more than just a slogan in California, because the California legislature has enacted a comprehensive set of equal pay laws. These laws have teeth; violate one of them and your company could end up in big trouble – perhaps even bankrupt. A general familiarity with the legislation in this area can help your company avoid this fate.
The California Equal Pay Act of 1949
The California Equal Pay Act of 1949 states:
"No employer shall pay any individual in the employer's employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs."
Any lawyer reading the wording of this provision will immediately notice how narrow the coverage is and how vague the wording is. Vague wording means potential loopholes. As time passed, the loopholes multiplied and the grumbling grew louder. In 2015 the California legislature responded by supplementing this legislation with new, stricter legislation.
The California Fair Pay Act
The California Fair Pay Act modified the California Equal Pay Act of 1949 to render it probably the most employee-friendly equal pay legislation in the United States. Three features of this law deserve special mention:
The salary history provision: With limited exceptions, a company cannot ask a job applicant how much they were making at a previous position and they cannot base an employee’s salary on his or her previous salary. The law also requires the company to provide an applicant with a written pay scale upon request.
The “substantially similar” work provision: An company cannot pay employees of different genders, races, or ethnic backgrounds differently for “substantially similar” work. “Substantially similar” work means similar effort, skill, responsibility, and working conditions.
The “bona fide factor other than sex, race, or ethnicity”: An employer can justify paying two employees differently on the basis of a “bona fide factor other than sex, race, or gender.” The factor must be applied in a reasonable manner, it must account for 100 percent of the difference in pay, and the employer bears the burden of proving this justification.
An employee who believes he or she has a claim for unequal pay has three practical avenues for pursuing a remedy:
File a complaint with the California Labor Commissioner (CLC);
File a civil lawsuit; or
Seek a private settlement with the employer.
A common means of resolving an equal pay complaint is to start off by filing a lawsuit, and then use the lawsuit as leverage to open private settlement negotiations with the employer. In most cases, the employee has two years after the violation to file a lawsuit.
Contact Us for Immediate Assistance
The foregoing information barely scratches the surface of what you need to know to avoid falling afoul of California equal pay legislation. At CKB Vienna LLP, we can guide you through its byzantine corridors so that your compliance cannot easily be questioned. We can also represent you with aggressive advocacy if a claim is made against you or if a lawsuit is filed against you.