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Equal Pay Act

California Now Leads the Nation in Protecting Women in the Workplace

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On October 6, 2015, Governor Brown signed SB 358 into law, amending the existing California Equal Pay Act, as codified at Labor Code section 1197.5.  The California Equal Pay Act will now read as follows:

Equal Pay Act Summary

An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.

Employees who demonstrate inequality in pay may recover the difference in pay, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorney’s fees. The statute of limitations is two years or three years for a “willful” violation.

In passing the new law, the Legislature recognized that women, on average, earn only 84 cents for every dollar their male counterparts take home. The statute also states that this gap is even greater for women of color; for example, Latina women earn only 44 cents for every dollar that white men make, which is the greatest disparity for Latina women anywhere in the country. The Legislature also found that wage inequality cost women in California a collective $33.65 billion, which contributes to a higher statewide poverty level for women than men, 18% to 15%.  The time has come for a change.

The new law, which takes effect on January 1, 2016, makes two important changes to existing law, which has been on the books since 1949. First, it lowers the standard a woman needs to meet to prove wage inequality; Previously, she had to show that she performs “equal” work to the men “in the same establishment” (generally defined as the same location). Now, she need only show that she performs “substantially similar” work to the working anywhere in the company.

Why is this important?

Employers can no longer give their employees different job titles or suggest differences between work locations to rationalize their discriminatory pay practices. “Equal pay for equal work” should not mean women are treated disparately because they cannot achieve a certain position or pay grade even though they are doing substantially the same work—and women can now compare their work to the work of male employees anywhere in the company to show that disparity. The new law prohibits payment of lower wages for women who work under similar working conditions as their male counterparts, when taking into account the skill, effort, and responsibility required in performing the work.

Most importantly, once a woman demonstrates that she is being paid less for doing “substantially similar” work to a man in the company, the burden falls on the employer to prove that the wage disparities between men and women are due to non-discriminatory reasons such as systems and policies already in place that reward seniority, merit, or quantity or quality of production.

Employers may also defend their wage differential if the pay difference is due to something other than gender, such as education, training, or experience, although only if that practice is “consistent with a business necessity”; if the employee shows that the employer could have served its business’s needs without paying its female employee less, the employer will be held liable.

Second, the new law requires greater transparency in the workplace.  Employers can no longer penalize or retaliate against employees for discussing their wages. As the Legislature has declared in this new law, “Pay secrecy also contributes to the gender wage gap, because women cannot challenge wage discrimination that they do not know exists.” This was precisely the issue with Lily Ledbetter, who became the champion for the amendment to the federal Fair Pay Act that became the first bill that President Obama signed into law upon taking office in 2009.

Ms. Ledbetter had worked at the Goodyear Tire and Rubber Company for 19 years before someone secretly slipped her an anonymous note that she was making thousands of dollars less per year than her male counterparts. Had she never received that note, Ms. Ledbetter never would have learned of the pay inequity at her workplace because Goodyear employees were prohibited from discussing their wages with one another.

Many pundits agree that California now has the strongest equal pay protection in the country. At the Feldman Browne Olivares law firm we are committed to changing the uneven balance of power between employers and hard-working female employees. If you believe you are being paid less at work because you are a woman or because you have been discussing your wages or working conditions with others, please contact us for a free consultation.

If you would like to talk with Feldman Brown Olivares about the California Equal Pay Act, please contact us now.

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