Pursuant to the Fair Pay Act, California employers of all sizes are now legally required to provide equal pay to all workers, regardless of gender, if they perform “substantially similar” work. The law went into effect at the beginning of the year and has been in the spotlight since.
The Fair Pay Act amended California Labor Code section 1197.5, which was known as the California Equal Pay Act which generally prohibited employers from paying lower wages to employees of one sex when compared to the pay of employees of the opposite sex.
The Equal Pay Act applied when employees (a) worked at the same establishment, and (b) performed “equal work” for duties requiring “equal” skill, effort and responsibility. The work also was required to be completed under similar working conditions.
Under the Fair Pay Act, the “equal work” requirement was eliminated and now bans employers from paying lower pay to employees of one gender as compared to the opposite gender when the employees whose pay is in question perform “substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions.”
The Fair Pay Act also eliminates the “same establishment.” Employers must now pay equal wages to employees performing substantially similar work throughout their entire business.The new equal pay law still excuses the requirement for equal pay where a difference in wages is due to (1) seniority, (2) merit, and/or (3) quality or quantity of production.
To avoid a potentially financially devastating claim, employers need to carefully review their payroll and employment records and policies and be mindful of any possible disparities in wages paid to employees who perform substantially similar work. It is in the best interest of employers to meet with an employment law attorney to assist in reviewing records and policies to ensure compliance with the new law.
From our law office offices in Modesto, California, our employment law attorneys represent clients in communities throughout the San Francisco Bay Area and Northern California. Contact Arata, Swingle, Van Egmond & Goodwin to arrange an initial consultation with one of our experienced Modesto employment law attorneys today.