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Expansion of the California Fair Pay Act

Ever since 1949, gender-based wage discrimination has been prohibited by California and has provided protection similar to the Federal Equal Pay Act (1963). On the 6th of October 2015 the California Fair Pay Act was signed by Governor Brown, which means that from the 1st of Jan 2016, employees can file lawsuits against employers for getting lower wages than their peers performing similar work, irrespective of the physical location where the work is performed.

Why is the California Fair Pay Act so important?

  • It enforces equal pay between genders for “substantially similar” work explained under certain defined parameters.
  • It demands bona fide explanation for differential pay among gender groups which hold under limited and narrow circumstances.
  • Shifts the responsibility to employer to explain any unequal pay.
  • It gives the right to employees to request the complete payment and compensation information of fellow employees.
  • Protects the privacy of employees and prevents acts against the requester.
  • The period for which records of wage rates, wages, job classifications has to be stored is increased from 2 to 3 years.

What is not covered by the California Fair Pay Act?

  • It cannot force an employer to disclose any wage information to an employee on his/her request.
  • It does require the employers to pay any compensation if they justify their payment disparity between two candidates with “substantially similar” work by educational qualification, experience, or training among the concerned employees.

How is the California Fair Pay Act enforced?

  • Employee(s) can file complaints with the Division of Labor Standard Enforcements or DLSE for any defiance of equal pay. Investigations are carried on while maintaining the privacy of the supposed victim – this is a priority.
  • Civil action can be pursued by the DLSE on behalf of the employee(s).
  • The remedy is usually the amount by which he/she/they were underpaid and an equal amount in case the violation is found to be willful.
  • If employee(s) is unsatisfied with results of DLSE investigation he/she/they may proceed to bring a civil action to recover the payment shortfall.

What are the must-do’s for all employers?

  • Remove redundancy in post description, job responsibility, and work output among multiple job titles/strata of pay. However the factors which define “substantially similar” work are still unclear under the new California Fair Pay Act.
  • Compare and compensate employees with similar job responsibilities, similar work, effort, and so on which are performed under comparable working conditions. The compensation includes making up for the salary shortfall as well as including the bonus, interests, equity grants, and so forth.
  • Establish a:
    • Seniority system
    • Merit system
    • Job related factors such as educational qualifications, experience, training, etc which are relevant to business consistency and quality.

This is especially necessary if you notice a considerable gender difference in the payroll categories of your establishment. These are a few bona fide factors which can be stated as explanations to rule out gender related discrimination.

Makarem & Associates Knows How to Win

Do you think you are being paid less than you deserve at work? Is there a subtle hint of gender discrimination on your paycheck? If you believe you are not being paid as much as you should, do not hesitate to get in touch with us at 310.312.0299 or email info@makaremlaw.com. We can evaluate your claim thoroughly and effectively.