Not a Member? Get access to HR news and resources that you can trust.
Here is how HR can help prevent the missteps that could cost your company big in court.
Is your employee handbook ready for the changing world of work? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Get the HR education you need without travel expenses or time out of the office.
Expand your influence and learn how to become an effective leader -- Join us in Phoenix, AZ, October 2-4, 2017.
California employers are preparing for the impact of the Fair Pay Act—the new law signed by Gov. Jerry Brown in October 2015, that significantly changes California’s gender equality pay law. Senate Bill 358 (SB 358), which went into effect on Jan. 1, 2016, requires employers to pay employees of the opposite sex equivalent wages for “for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” This is a significant change from the law’s former requirement that employees of the opposite sex receive equal pay for “equal work.”
The amended law also drops a requirement that wage discrimination claims be based on a comparison of the wages of male and female employees “in the same establishment.” As a result, employees may attempt to show a violation of the law by comparing their pay with the pay of employees performing substantially similar work at other work sites.
Employers may justify a pay differential by demonstrating that it is based on:
Employers that rely on this last defense must demonstrate that the “bona fide factor” is:
What Can Employers Do Now?
Undoubtedly plaintiffs’ lawyers will see this amendment as an invitation to file lawsuits alleging that employees working in various positions and at distinct locations are victims of wage discrimination. In addition, we can expect disputes over what constitutes a business necessity that would give employers a defense to compliance with the new law. Plaintiffs’ attorneys also will likely argue that even unintentional pay disparities can violate the law.
The change in law should prompt California employers to take a number of steps to ensure compliance with the new law, including auditing pay levels, reviewing pay and record-retention practices, and maintaining accurate records on pay scales, wage rates, and personnel data.
Christopher W. Olmsted is a shareholder in Ogletree Deakin’s San Diego office. Hera S. Arsen is managing editor of the firm's publications, overseeing the firm's print and online legal publications and content. Republished with permission. © 2016 Ogletree Deakins. All rights reserved.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
New Pro Member Special
SHRM’s HR Vendor Directory contains over 3,200 companies