As a business owner, it is important to stay up to date on all aspects of employment law, and know what laws have recently gone into effect or changed due to new legislation. The Equal Pay Act encompasses two bills; A.B. 1676 and S.B. 1063. It adds to the California Fair Pay Act, and the most recent changes went into effect January 1, 2017. The bills were enacted to address concerns of pay inequity between men and women who perform substantially similar work and provides additional protections on the basis of race and ethnicity.
The Equal Pay Act changes the previous legislation in several ways. The California Fair Pay Act prohibited employers from paying an employee less compensation for equal work. The Equal Pay Act prohibits disparities in pay between men and women who perform “substantially similar work, when viewed as a composite of skill, effort, and responsibility.” This widens the definition beyond “equal” work and job title. It also prohibits employers from relying on employee’s former salary to account for the difference between salaries of similar employees. Employers must prove any difference in wage is not determined by a gender-based factor, but job related – such as seniority, merit, a system that measures production, or a “bona fide factor other than sex.” This must be consistent with business necessity, for example, based on education, training or experience.
The Equal Pay Act has also eliminated the requirement that comparisons only be made between employees at the same establishment, so businesses with multiple locations must be prepared to evaluate employees across locations equally.
The new law includes express anti-retaliation protections for workers that assist employees with bringing claims under the Act. It prohibits retaliation against an employee for discussing his or her salary or the salary of others, or for asking about the salary of others.
The final change made extends the number of years that employers must maintain wage and salary related records from 2 to 3 years. Employees must file claims within 2 years of the date of violation, unless the disparity in pay is willful, then the employee has within 3 years to file a claim.
If you are interested in reading more, the Department of Industrial Relations has a list of frequently asked questions on the California Equal Pay Act. You can read the full text of SB 1063 here and AB 1676 here.
A.L. Harvey Law has years of experience working with small and mid-sized business owners to ensure you are in compliance with California’s complex laws, protecting both the liability of your business and your personal assets. If you need assistance or additional resources related to the Equal Pay Act or other aspects of employment law, please do not hesitate to contact us at info@alharveylaw.com or (530) 217-3520.
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