California’s New Fair Pay Act: Equal Pay Protections Prohibiting Gender and Race-Based Inequality

California has passed the toughest equal pay laws in the country, and Californians are beginning to see the results of the law. tweet

On January 1, 2016 California passed the California Fair Pay Act, SB 358, amending California Labor Code § section 1197.5, to eliminate the wage gap between men and women. On September 30, 2016, California also passed a similar law, SB 1063, expanding the Fair Pay Act by requiring employers to pay people of different races and ethnicities the same wage for substantially similar work. This new law will go into effect next year.

These new laws are greatly needed. In California, women earn 86 percent of what men make on average, but constitute over half of the workforce. In 2015, Latina women earned only $0.43 to the white man’s dollar, and African American women earned $0.56 to the white man’s dollar. A wage gap also exists for men of color. Black men earned 73 percent of what white men did in 2015, while Latino men earned 69 percent, according to a Pew study.

Reinforcing protections

Although state and federal laws already prohibited discriminatory practices including compensation, the Fair Pay Act bolsters protections that were already in place. It places the burden of proof on employers and forbids them from retaliating against employees who engage in conversations about their salaries. In addition, the Fair Pay Act prohibits employers from giving women or people of color less compensation for performing “substantially similar” work, as opposed to identical work.

In order to determine whether the work performed by employees of different genders is “substantially similar,” the Fair Pay Act requires consideration of the skill, effort and responsibility required to perform each role. Job titles are not required to be identical. The employees do not have to work at the same job site or location. This is an important change. Prior to the enactment of the Fair Pay Act, courts construed the law to require equal pay only when the female employees had the identical job as a male counterpart.

Moreover, the Fair Pay Act sets forth burdens of proof for the employee and employer. The Fair Pay Act states that once the employee has established a prima facie (Latin for “at first sight”) case of discrimination, the employer has the burden of proving that an exception or defense to the rule of equal pay is applicable. The employer must show that the factors relied upon to account for the difference in pay are applied in a reasonable manner, and explain the entire difference in compensation.

The Fair Pay Act also protects employees’ ability to reveal, discuss, and ask about their own or co- workers’ salaries. Labor Code §232 (a), (c). The new law prohibits any policies that would prevent employees from disclosing their salaries and also protects against retaliation regarding discussions about salaries. By providing these protections, the law enables employees to learn about whether or not they are in fact receiving equal compensation.

Already helping women in California

The Fair Pay Act has already helped hundreds of women in California enforce their right to equal pay. In a recent class action lawsuit called Coates v. Farmers Insurance (Northern Dist. of California 2016), close to 300 female attorneys alleged that the company was in violation of the California Fair Pay Act when it compensated them less than their male counterparts. The suit resulted in a $4.1 million settlement in which Farmers agreed to significant restructuring and an annual statistical analysis to ensure that the company compensates women fairly. We anticipate that the new law will similarly help workers who have been discriminated against based on race and ethnicity to enforce their right to equal pay.

What Should You Do If you Believe You Are Not Receiving Equal Pay For Your Work Because of Your Gender, Race, or Ethnicity?

If you believe that you are not being compensated fairly in comparison to an employee doing substantially similar work because of your gender, race, or ethnicity, it will be important that you know your rights, ask questions, and document all that you can. In order to prove that you are doing substantially similar work as another person, you may want to collect documents demonstrating your responsibilities, including, for instance, your job description. You should also talk to your coworkers and employer about your salary and ask questions about the salaries of other individuals performing similar work, along with their years of experience. Collecting pay records including pay stubs would also be important for your case. If you ask about, complain, or file a grievance regarding your unequal pay, it is unlawful for the employer to retaliate against you. To file an Equal Pay Act claim with the Department of Industrial Relations, please visit http://www.dir.ca.gov/dlse/dlseRetaliation.html.

If you feel that you are not being compensated fairly because of your gender, race, or ethnicity, you should contact an experienced employment attorney at Strong Advocates. We can assist you in determining your rights and legal options. We are committed to helping you get the justice you deserve.