Female employees in California can now challenge gender-based wage gaps with the CA labor law supporters say is the strongest equal-pay protection in the nation.
Democratic Gov. Jerry Brown signed the measure, known as the California Fair Pay Act, on October 5, 2015 at an event at Rosie the Riveter National Historical Park in Richmond, northeast of San Francisco.
The bill by Sen. Hannah-Beth Jackson from Santa Barbara, expands on California's existing equal pay law. In addition, it goes further than current federal law by placing the burden of proving that a man's higher pay is based on factors other than gender on the employer.
The new law also protects employees from discrimination and retaliation if they ask questions about how much other people earn, although it does not require that employers provide that information. Workers also now have the right to sue if they are paid less than someone with a different job title who does "substantially similar'' work.
The New CA Labor Law Requires Equal Pay From California Employers
The law, Senate Bill 358, passed on a 39-0 vote as Republicans supported the legislation in a unanimous bipartisan vote what they view as a workplace fairness law that would not unjustly burden employers with litigation.
The legislation, which prohibits employers from retaliating against employees who inquire about coworker pay, also requires employers to show that any difference in pay is related to the job and not some ancillary trait like “a charming personality or impressive golf game.”
Some have speculated on whether this may open the door to additional claims and further litigation.
The CA Labor Law Goes Further Than the Federal Version
In Washington, Democrats have pushed the Paycheck Fairness Act (S.862, H.R.1619) since 1997. The federal bill is similar to the recent California law except that, among other issues, it would expand an employees’ ability to receive punitive damages from her employer. That provision is not part of the California legislation.
Supporters of California's equal pay law stress the fact that it does not authorize punitive damages, and that this does not change under the new law. One California Republican Senator noted the new legislation would “avoid a climate of unnecessary litigation.” She called the proposed federal law, however, “more extreme and less realistic.”
Do We Need a New CA Labor Law to Guarantee Equal Pay?
The California Fair Pay Act changed the wording of existing law which now requires “equal pay for equal work”, to read equal pay for "substantially similar" work. While employers are still allowed to pay workers more money based on merit, seniority and other quantifiable factors, it is designed to narrow a loophole that now includes the phrase "any bona fide factor". This has purportedly been used as an excuse to pay men more than women for doing substantially the same work. This description is considered to be so broad that few women could successfully challenge it.
Here is a broad look at the current state of the gender pay gap across the U.S.
Although the state of California and the federal government have equal-pay laws prohibiting employers from paying females workers less than men for “equal work” a wage gap persists in California.
California passed its bill in 1949; Congress approved a similar bill in 1963.
According to the Anita Borg Institute, in Silicon Valley, which is often seen as a meritocracy, women working in the technology sector earn 70 percent of what their male counterparts make, on average.
Other studies show that a woman in California working full time makes 84 cents to every dollar a man earns, according to the San Francisco-based civil rights group Equal Rights Advocates.
The Real Cost of the Gender Pay Gap
Even with equal pay laws in force since 1949 and 1963, relatively few women in California have made pay discrimination claims against their employers. According to a review by Equal Rights Advocates in 2013 only six women in California filed claims over their pay.
One explanation put forward is the lack of transparency among employees regarding co-worker’s salaries. This is a contentious aspect of the equal pay debate. While the new law does not require disclosure of co-worker salaries, supporters hope it will begin to change what they call the "culture of secrecy" in the private sector about salaries.
Some of the existing disparity in salaries may be attributed to common employment such as establishing starting salaries which rely on the earnings of a new hire’s last job as a basis. This can lead to an inequity in pay simply as a carryover from a previous pay inequity, according to supporters of the new law.
The real impact occurs many years into a woman's career. What may start off as a barely noticeable difference over time grows to a point where a mid-level female employee is losing close to a half a million dollars due to the wage gap.
If you have questions regarding California labor law requirements, or other HR issues and practices, let us help you in managing your HR needs, payroll processes, and staying on top of compliance demands. Get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.