California’s Fair Pay Act: What It Means for Employers and Employees

Employees and Law - Fair Pay Act 2015
Women and men employees may soon benefit from equal pay laws.

You may have been hearing about a new employment law in California called the Fair Pay Act, which is awaiting Governor Brown’s signature but expected to go into effect shortly.

The Fair Pay Act is a bold move forward for men and women workers in California, as it ensures an equal wage for employees doing “substantially similar” work. This law applies even if employees have different job titles or work in different offices for the same employer.

But what does the employment law boil down to for employers and employees, specifically? Let’s take a closer look.

Employers

For employers in California, the Fair Pay Act means it is time to revisit equal employment opportunity policies and compensation guidelines, making sure both include language regarding the prohibition of pay discrimination.

The Fair Pay Act requires employers to prove that wage differentials are based on seniority, merit, quantity or quality of production (which is governed by an employer-based system), and a “bona fide” factor other than sex that is deemed a legitimate business necessity. Therefore, the compensation system needs to be able to justify the differentials.

Further, make sure employees understand these differences and how they apply to compensation decisions. Under the Fair Pay Act, employees can now discuss wages, so transparency is going to an important factor for employers under the new law.

Employees

Male and female employees in California may soon see changes in response to the Fair Pay Act. Aside from clarification on compensation and differentials, workers will be able to ask about and discuss other employees’ compensation – something that used to be illegal.

The Fair Pay Act applies to both public and private businesses, so the impacts will be felt systemwide. And because the equal pay employment law will be governed by the Division of Labor Standards Enforcement, workers can file complaints through the agency should problems arise.

Concerns about the Fair Pay Act

If you have questions or concerns about how the Fair Pay Act will affect you, then please contact the Lawyer Referral and Information Service (LRIS) to discuss your situation. We may refer you to an employment lawyer or direct you to equally helpful resources in the community. Call (619) 231-8585 for more information.

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