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Comparing The California Fair Pay Act And The Equal Pay Act

As of January 1, 2016, California law was amended to include new employee protections under the Fair Pay Act. Under the new law, employees have the right to be paid equally, regardless of gender, for substantially similar work at the same employer. The purpose of the law is to help eliminate the gender pay gap, in which women often are paid significantly less than men for similar work.

Understanding California's Fair Pay Act & Equal Pay Act

What is the California Equal Pay Act?

The Equal Pay Act, which dates from 1949, has been amended by the California Fair Pay Act effective January 1, 2016, to include new protections for employees and requirements for employers.

Under the old, existing law, generally known as the California Equal Pay Act, employers had to demonstrate that any disparity in wages was due to one of four rationales:

  1. A seniority system,
  2. A merit system,
  3. A system based on productivity or quality of work product, or
  4. A bona fide factor such as education, experience, or training.

What is the California Fair Pay Act?

Under the revised law, if the employer relies on a bona fide factor such as education or experience, then the employer must also show that the factor is not based on a sex-based rationale, is related to the job, and is consistent with a business necessity.

Employers are now required to demonstrate that they affirmatively have applied at least one of the four factors and have truly relied upon one or more of them in determining wage compensation.

New Record Keeping Requirements

Under the prior law which was in effect up until January 1, 2016, employers were required to maintain relevant records on wages, job classifications, and other terms and conditions of employment for two years. Now, under the new law, employers are to keep these records for three years.

Prohibition on Wage Secrecy

One issue that often occurs in the workplace is that employers prohibit employees from discussing wages amongst each other.

This is believed to stifle employee rights and may perpetuate wage disparities between individual workers in the same office.

Under the old law, it was illegal to require a worker to sign a nondisclosure agreement regarding discussing his or her wages with other employees. Under the new law, it is now also illegal to prohibit an employee from discussing the wages of other employees as well. It is also no longer permissible to prevent employees from discussing wages in any manner, not just in an NDA as part of his or her employment terms.

"Similarly Substantial Work" Rule

Under the old law, employers were required to pay a male and female employee doing the same job at the same location the same wage, assuming there were no other relevant reasons for the disparity, such as seniority. But the newly revised law broadens the rule by requiring employers to pay employees similarly when they are engaged in "substantially similar work" as it relates to the necessary skill, effort, and responsibility for the job, regardless of whether they are engaged in the same exact position or title and even if they work in a different location.

Anti-Retaliation Rules Under the California Fair Pay Act

The new law also provides employees with anti-retaliation protections. The Fair Pay Act makes it illegal for an employer to discharge, discriminate or otherwise retaliate against an employee who exercised his rights (that is, discussing wage information as permitted under the law).

So, if you are a California employee facing discrimination that is related to a protected activity under the Fair Pay Act, then you may have a legal right of action against your employer in California court. If you believe that you are a victim of workplace discrimination, you and your California employment attorney must file a complaint within one year of the violation.

If you have further questions or concerns on California employment law issues, such as wage disparity or gender discrimination, you could be well-served by contacting our passionate employment lawyers at Hennig Ruiz Law Firm for legal advice and counselling regarding employment law matters.

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