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California Assembly Bill 1676 Will Help Combat The Gender Pay Gap Problem

california-ab-1676-salary-history-gender-pay-gap.pngAccording to some, California is now playing second fiddle to Massachusetts when it comes to equal pay based on gender. But Governor Jerry Brown recently signed California Assembly Bill 1676 into law. The new employment law bill that breezed through the Legislature (with practically no opposition) prohibits employers from solely using an applicant's salary history to justify wage disparity.

Understanding California AB 1676

California AB 1676 amends California's Fair Pay Act (CFPA) and it essentially says that salary history cannot justify a gender pay gap. There are a few limited exceptions, such as a seniority or merit system, but otherwise, it states that a gender-related pay disparity is presumed to be discriminatory. AB 1676 also significantly upgrades the criminal penalties for illegal pay scales.

A year ago, Governor Brown vetoed similar legislation in order to "give [the Fair Pay Act] a chance to work before making further changes." The California Chamber of Commerce and other business groups then withdrew their opposition.

The Massachusetts version of this law, which takes effect January 1, 2018, flatly forbids employers from requesting salary history.

The Gender Pay Disparity Problem

The last major piece of federal legislation that relates to gender pay disparity - the Pregnancy Discrimination Act - was passed almost 40 years ago, and it does not even directly address the ongoing gender pay gap problem in the United States. As a result, the United Nations estimates that the gender pay gap will not close for another 70 years, absent drastic and forthcoming action.

One reason for the lack of progress may be over-reliance on civil rights-era laws. The Equal Pay Act has been around since 1963, and it prohibits "paying wages to employees. . .at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility." For many, the EPA is enough. Secondly, there is some dispute as to the nature of the gender-pay gap. For example, many observers point to the so-called "mommy gap:" women leave the workforce for child-rearing and when they return, they have less work experience and are therefore paid less. But there is also plenty of evidence, both anecdotal and statistical, that the gender pay gap is discriminatory in nature.

The Gender Pay Gap Solution

The EPA contains very strong prohibitions, but it is not easy for plaintiffs to win these gender discrimination cases. In a discrimination matter, once the plaintiff establishes a prima facie case, the defendant need only assert a non-discriminatory motive for the alleged discriminatory conduct, which in this case is the pay disparity. Then, unless the plaintiff can prove that the given rationale is a mere pretext, the plaintiff loses.

Salary history inquiry bans may work because they remove one of the most commonly-given non-discriminatory motives. Assume ABC Company pays Ellen Employee substantially less than her co-worker Edgar Employee, even though they perform substantially the same job. In an EPA action, ABC can argue that it used Ellen's salary history to determine her compensation. Therefore, if ABC cannot ask questions about salary history, it may be more hard-pressed to give a non-discriminatory reason for the pay gap.

California Assembly Bill 1676: Additional Information

  • California Assembly Bill 1676: Bill Text
  • California Assembly Bill 1676: Bill Analysis
  • California's Fair Pay Act Expanded To Preclude Employers From Relying On Salary History To Justify Wage Gaps via JDSupra.com
  • Pay equity bill signed into law via Record-Bee.com

Are you facing gender discrimination at work? If you feel your employer is paying you less money due to your gender, California employment laws may help protect you. Contact our passionate employment attorneys at Hennig Ruiz for your free consultation today.

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