Wednesday, September 9, 2015

Fair Pay Act Heads to Governor for Signature

On August 31, 2015, the California Senate unanimously passed SB 358. Titled the "Fair Pay Act," this bill amends California Labor Code section 1197.5 which prohibits wage disparities based on gender. SB 358 strengthens the procedures and protections for employees who report a violation of section 1197.5. Importantly, section 1197.5 applies to public employers. With these new protections, public employees may use section 1197.5 more efficiently to challenge discrepancies in wages between genders within classifications.

The Fair Pay Act requires an employer justify a disparity in wages between men and women who perform the same job. A wage differential is appropriate when the employer reasonably applies one of the following factors: 1) a merit system; 2) a seniority system; 3) a system which measures earnings by quantity or production; or 4) a bona fide factor other than sex such as education, training, or experience. For the last element, the employer must demonstrate the factor is not based on or derived form a sex-based differential in compensation, is job related with respect to the questioned position, and is consistent with a business necessity. If the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential, then the employer may not use this factor as a defense.

The Fair Pay Act also adds additional protections for employees who complain about wage disparities. Employers may not fire, discriminate, or retaliate against an employee who invokes the Fair Pay Act's provisions. Employees may disclose their own wages, discuss the wages of others, and inquire about another employee's wages without fear of reprisal.

To enforce the Fair Pay Act, an employee can either file a confidential complaint with the Department of Labor Standards Enforcement or bring a civil action. Any civil action must be commenced within one year of the alleged violation.

This bill is one of the most aggressive attempts in the country to remedy the wage disparity between genders. According to the Los Angeles Times, women in California on average make 84 cents to every dollar earned by a man. Nationally, the average is 74 cents. Women of color are even more disadvantaged with Latinas making only 44 cents to every dollar earned by a man.