San Diego Employer and Business Litigation Attorneys

Effective January 1, 2016, the California Fair Pay Act is designed to expand on existing Federal and State laws that prohibit gender-based pay discrimination.  There have been employment laws on the books since the 1960’s that banned discriminating the amount a person is paid or the receipt of employment benefits based upon gender.  California’s Fair Pay Act expands existing laws in many important areas.

Employees are no longer bound by region or geography.  Employee pay can be compared even if they do not work in the same facility.  That means that the pay of an employee in Southern California could be compared to the pay of an employee in Silicon Valley.

The new law does not require the employees to have the same title, or hold “substantially equal” jobs.  The new law bases comparisons upon the actual work definition of skill, effort and level of responsibility, performed under similar working conditions.

California employers are now required to justify pay differentials between like employees, and specifically limits the factors employers can use to vary pay scale.  These factors must be applied fairly and reasonably, and, when taken into consideration as a group, must justify the entire pay differential.

California employers need to fully understand the implications of this new law.  The changes embodied in California’s Fair Pay Act substantially lower the standards for an equal pay lawsuit.  Now, employees are permitted to compare themselves to persons of opposite gender, who work at any location for the same employer or owner, in any like position (though not necessarily the same job title or specific function).

The California Fair Pay Act places the legal burden squarely on the shoulders of the employer to demonstrate that pay differences are based solely upon permitted “factors”, which are:

  • A Merit System
  • A Seniority System
  • A System Based Upon Measured Quantity or Quality of Production, or
  • A “bona fide” factor other than gender, including but not limited to education, experience or training

The last exception is applicable only when an employer can prove that the differential is not gender related, but is “job related” as it applies to the specific work in question, and is consistent with a “business necessity.”  This factor will not apply if the plaintiff is able to establish that there is another business practice that could serve the same business purpose without justifying the difference in pay.

Older California Labor Code sections were removed by California’s Fair Pay Act.  These included sections that applied when work was performed “at different geographic locations” and “on different shifts or at different times of day.”  However, there may be an opportunity for California employers to justify pay differential based upon these factors if they can prove that factor is “consistent with a business necessity” as provided in the new law.  This is based upon an entry by the Bill’s author in the California Senate Daily Journal on May 26, 2015.

Contact Experienced California Labor Dispute and Litigation Attorneys Regarding Employer Defense of California’s Fair Pay Act

As with any new law, the California Fair Pay Act is new and legally untested.  If you are a California employer and have questions about California’s Fair Pay Act, we invite you to contact us, or call 858-535-1511 for a comprehensive and confidential consultation.