The California Equal Pay Act of 1949 was enacted to eliminate gender discrimination in the workplace by providing “equal pay for equal work.” As of January 1, 2016 the California Fair Play Act amended the EPA taking an even more aggressive approach. The amendment now provides for equal pay for “substantially similar work” regardless of work title or work location. Though “substantially similar work” was not defined in the Act, the California Department of Industrial Relations indicated on their website that it means “work that is similar in skill, effort, responsibility, and performed under the same working conditions.”
The effect of the amendment is that employees may now compare their salaries to other employees with different job titles who perform different jobs in different locations. The new law is plaintiff friendly and makes it harder to justify wage gaps. To overcome an Equal Pay Act claim an employer must now prove the wage differential is due to a “bona fide factor” other than sex, such as education, training or experience. Prior salary alone cannot justify wage disparity. Moreover, legislators proposed another amendment (A.B. 1676) that would prohibit employers from asking about salary history in addition to requiring employers to provide a pay scale to applicants for the employment position they seek.
Employers can protect themselves by being proactive and removing salary history questions from employment applications. They must also ensure that any wage disparities are based on seniority, merit, quantity or quality of production, or any other “bona fide factor” necessary for a legitimate business purpose. Keeping good records of wages, wage rates, job classifications, and other terms and conditions of employment for a period of at least three years can help if an Equal Pay Act claim ever arises.
If you have any questions on the above, please contact Heather Dillion, Esq. or any of the attorneys at Shulman Bastian Friedman & Bui LLP at (949) 340-3400.