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California Fair Pay Act vs Equal Pay Act, What’s the Difference?

Man & Woman Comparing Pay Scales | Feldman Browne Olivares Law Firm

Some of the most important pieces of US employment legislation introduced over the past several decades have been enacted in the State of California. California has a reputation as a leader in industry, an innovative place to spawn new ideas and a place that fosters creativity and inspired action among its workforce – especially when it comes to labor standards and protection for employees. While the Equal Pay Act of 1963 was built upon the much-needed foundation of the 1938 Fair Labor Standards Act, California’s Fair Pay Act of 2015 goes even further in its goal for equal protection for California employees. Let’s compare and contrast the original 1963 Act with California’s recent additions under the 2015 Fair Pay Act.

The Equal Pay Act of 1963

The 60’s were a period of incredible social change in the US, and one of the most important pieces of legislation that was signed into law during the 1960s was The Equal Pay Act of 1963 (EPA). John F. Kennedy signed it into law as part of his New Frontier Program, with the intention of addressing the pervasive wage disparity between men and women at the time. The Equal Pay Act of 1963 imposed strict mandates that a person’s sex could not be used as the basis for any discrepancy in wages.

According to the EPA, an employer would be in violation of the Act of 1963 if these three conditions were present:

  • Different wages are paid to employees of the opposite sex
  • The employees in question perform essentially the same job requiring equal effort, skill and responsibility
  • The employees perform their jobs under similar working conditions

A narrowing of the gender pay gap has been the biggest impact of The Equal Pay Act of 1963. Women earned an average of 62 cents on the dollar of men’s earnings in 1979, compared to 80 cents in 2004. Unfortunately, though, that gap has remained relatively unchanged since 2004, so the California Fair Pay Act of 2015 was introduced and signed into law to continue the good fight against gender-based wage discrimination. Let’s take a look at this important piece of legislation.

The California Fair Pay Act of 2015

Though the Equal Pay Act of 1963 represented a vital step forward in the protection of previously underserved employment groups like women, minorities or foreign-born individuals, the stagnation in the gender pay gap seen throughout the late nineties and into the early 2010s was one reason for the introduction of the California Fair Pay Act of 2015. Also known as Senate Bill (SB)358, this amendment to the California Equal Pay Act of 1949 seeks to close a loophole in the existing CA labor code that continued to allow inadequate protection for employees throughout numerous industries in the state. SB-358 requires that:

  • Employers may only pay different wages to employees based on a seniority or merit system, a variation in the quality or quantity of work, or any bona fide factor other than sex, race or ethnicity. The “bona fide” reason must be a job-related concern that is aligned with business necessities.
  • Employers may not punish or prohibit workers from discussing their rate of pay with another employee, and cannot use previous salary as the sole reason not to extend a job offer. Employers also cannot ask what a candidate’s previous salary was and cannot use external sources to determine this amount.
  • Equal pay must be calculated using the notion of “substantially similar work,” not necessarily a requirement that two employees work in the exact same location for an employer.

Employees who feel that they have been discriminated against may file an administrative complaint with the California Labor Commissioner or file a lawsuit in court. The timeline to do so ranges from 6 to 24 months, so concerned individuals are encouraged to quickly seek the knowledgeable counsel of an employment law attorney.

Equal Pay Act File with Gavel | Feldman Browne Olivares Law Firm