PAY EQUITY TASK FORCE RESOURCES

The California Commission on the Status of Women and Girls (CCSWG) formed the California Pay Equity Task Force in 2016, the year that the Fair Pay Act of 2015 took effect. The Fair Pay Act amended California’s equal pay law as it applies to employees of the “opposite sex.”

In 2017, another law took effect that further expanded protections under California’s equal pay law to employees of a “different race or ethnicity.” Because the CCSWG formed this Task Force in 2016, our work has focused primarily on creating tools and guidance related to implementation of the Fair Pay Act of 2015.

We recognize that equal pay issues affect employees at the intersection of sex and race/ethnicity and that more work needs to be done to address the wage gap facing people of color and women of color in particular. Our hope is that the tools and materials provided here will serve as useful starting points for employees, employers, and unions so that we can work towards achieving pay equity for all workers throughout California.

The following resources are approved as of September 10, 2018. Check back for updates.

EMPLOYEES

EMPLOYERS

UNIONS

This information is for union employees/representatives to use in representation of members and the collective bargaining process.

Am I Protected From Retaliation?

Yes. California’s equal pay laws protect against retaliation and there are other laws that may
apply to you if you engage in these kinds of activities with your coworkers.

Know Your Rights

WHAT DOES IT MEAN TO BE PAID FAIRLY UNDER CALIFORNIA’S FAIR PAY ACT?

Suppose you’ve been at a job for a while and you suspect that you are getting paid less than men at our company, agency, or organization for doing similar work – but you don’t know for sure. You’d like to do some research, but where do you start? Below are pay gap calculators you might find useful to help estimate if there is a gender pay gap where you work.

Pathways to Equity: Women and Good Jobs 
Closing the Gap: 50 years Seeking Equal Pay 
Economic Policy Institute: What Could You Be Making?

If You Believe You're Not Being Paid Equally....

There are many ways you can find out if you’re being appropriately compensated for your work and your particular role.

In addition to speaking with your co-workers and colleagues who do similar work as you do but work for a different employer (especially if they work in the same geographic area or region as you), check out the resources below to learn more about what the pay range looks like for people with your job and/or in your occupation in a particular area. Remember that job titles vary and can be helpful, but are not determinative, in figuring out what the appropriate compensation level is for a particular position. Resources that provide pay ranges, rather than just the average or median salary for a particular type of job, are generally more helpful. You can also cross-check different sources to find out more about what people in your job or field make, and how your salary or hourly rate compares.

Information About Wages

There are many resources that employers and employees may wish to consult to determine appropriate compensation for a particular role. Please also note that job titles are not determinative but just an initial step in determining appropriate compensation for a particular role. The Task Force recommends consulting resources that provide a pay range, rather than the median compensation for a particular role. It is also recommended that more than one resource be consulted.

Possible resources include, but are not limited to:

 

 

 

  • Glass Door. Glass Door is a database of information about employers that includes salary reports submitted by both employer and employee users of the site.

 

  • Salary. Salary.com is a database that allows employers to analyze their internal pay practices against market rates. 

 

  • Payscale. Database that compiles individual salary profiles through crowdsourcing and big data technologies for use by employers and employees. 

 

  • SimplyHired. Calculator allows users to compare salaries with others in the same profession regionally and nationally.  Data is taken from their job listings. 

 

  • America’s Career Infonet. Website, sponsored by the U.S. Department of Labor, allows users to search salary and hourly ranges by zip code and occupation category. 

 

The resources provided above are not an exhaustive list and the Task Force does not endorse reliance on any particular resource.  Please also note that the data provided in the resources above may change following future development in California law.

Why Should Employers Care That Employees Are Paid Equitably?

Beyond legal compliance, it’s the right thing to do. There are also some practical reasons to commit to pay equity. You can brag about it. A company’s good reputation makes it easier to attract consumers, and recruit and retain employees in today’s competitive and informed workforce. And, if you are open and transparent about pay practices, you are ready and primed to quickly and accurately respond if employees complain or publicly accuse the company of paying them unfairly.

If you can clearly articulate your compensation philosophy and your commitment to pay equity, you are much more likely to recruit, retain, and engage your most important asset – your people. It is not just a “feel good” management approach, it is a logical business practice. It is important to demonstrate that you care, why you care and how you plan to continue your commitment to workplace fairness and equity.

Measuring the Pay Gap

The information provided here is meant to give a general framework of questions and concepts for employers interested in conducting a pay audit, hiring a qualified statistician to conduct a pay audit for them, or hiring internal staff to do this work. The purpose of this tool is three-fold: 

  • Provide a framework to assist employers and analysts to design and structure an analysis plan.
  • Identify some widely accepted analytical approaches to measure pay equity.
  • Identify questions employers can ask when hiring someone to do a pay equity analysis for them.

There is no universally applicable, one-size-fits-all method for measuring pay equity.  The tools provided here are not meant to be an exhaustive treatment of all methods.  Instead, they provide an overview of some commonly-used methods for analysis and introduce concepts and vocabulary that may be helpful in understanding the components of a pay equity analysis. Given the complexities of performing statistical analysis, it is a best practice to work with an expert in pay equity analysis.

 

Information About Wages

There are many resources that employers and employees may wish to consult to determine appropriate compensation for a particular role. Please also note that job titles are not determinative but just an initial step in determining appropriate compensation for a particular role. The Task Force recommends consulting resources that provide a pay range, rather than the median compensation for a particular role. It is also recommended that more than one resource be consulted.

Possible resources include, but are not limited to:

 

 

 

  • Glass Door. Glass Door is a database of information about employers that includes salary reports submitted by both employer and employee users of the site.

 

  • Salary. Salary.com is a database that allows employers to analyze their internal pay practices against market rates.

 

  • Payscale. Database that compiles individual salary profiles through crowdsourcing and big data technologies for use by employers and employees.

 

  • SimplyHired. Calculator allows users to compare salaries with others in the same profession regionally and nationally.  Data is taken from their job listings.

 

  • America’s Career Infonet. Website, sponsored by the U.S. Department of Labor, allows users to search salary and hourly ranges by zip code and occupation category.

 

The resources provided above are not an exhaustive list and the Task Force does not endorse reliance on any particular resource.  Please also note that the data provided in the resources above may change following future development in California law.

Best Practices for Establishing Pay Equity in Collective Bargaining

ADDRESSING PAY EQUITY IN COLLECTIVE BARGAINING

Unions can play an important role in narrowing the persistent gender wage gap within the industries and organizations where they have bargaining power by raising pay equity as an issue to be addressed in the collective bargaining process. Where a pay equity audit has already been conducted and the parties have identified disparities in compensation between individuals or groups of employees who are of different sexes or races/ethnicities and doing substantially similar work, the parties can specifically negotiate about the wage rates for individuals or classifications affected. Unions can also seek to negotiate over the terms and timeline for conducting and/or overseeing a pay equity audit in circumstances where this has not been done. In addition, they can negotiate for changes in hiring, compensation, promotion, and leave policies that would help to alleviate the root causes of pay inequity.

Below are some examples of potential approaches to addressing pay equity issues through collective bargaining. This is an illustrative rather than an exhaustive list, and not all of the strategies listed below will apply or be useful in every unionized workplace. For example, certain suggested approaches to bargaining over compensation practices and structures may only be relevant in situations in which the collective bargaining agreement allows for discretionary pay increases by management.

  • Establish a Joint Labor Management Committee to Conduct and/or Oversee a Pay Equity Audit. Where a pay equity study has not been conducted, the parties could utilize the collective bargaining process to establish a Joint Labor Management Committee (JLMC) on Pay Equity and provide funds for the JLMC to either conduct a pay equity audit itself or hire an outside expert/consultant to design and carry out such evaluation under its oversight. In either case, parties will need to agree on:
    • the number of union and management representatives on the Committee;
    • the role of the JLMC in the audit process (i.e., as the entity that will carry out the
      audit or facilitate and oversee it) and its budget;
    • how often and in what manner the JLMC will keep the parties apprised of the
      progress of the audit and report on its findings;
    • the nature and extent of the JLMC’s authority to make recommendations to the
      parties about changes to policies, wage rates, job classifications, compensation
      structures, and/or hiring practices that would help to alleviate any gender
      and/or race-related wage gaps revealed by the audit;
    • the term of the JLMC and timeline for the completion of the initial pay equity
      audit and issuance of the JLMC’s final recommendations, and
    • a schedule of meetings for the JLMC.
  • In addition to the terms above, contract language should specify whether the pay equity analysis will be conducted during the term of the Agreement with a re-opener to address any pay inequities and/or to negotiate about the JLMC’s recommendations. The parties should also ensure there is a clear process for resolving any disputes about whether or how to implement the JLMC’s proposed changes. Alternatively, the parties could agree to convene the JLMC and complete an initial pay equity audit prior to the start of the next round of negotiations, with any inequities to be addressed at that time. Contract language could also establish the pay equity audit as a periodic event that will occur prior to the expiration of each contract, rather than a one-time snapshot, which would enable the union and management to evaluate the impact and effectiveness of any changes they agree to make.

 

  • Review and update job descriptions. As part of the collective bargaining process, the parties may review job descriptions for all covered classifications and positions to ensure that they are accurate and provide sufficiently specific information to be useful in conducting a pay equity analysis.

 

  • Correct inequities in pay rates and pay scales. In the event that a pay equity study has already been conducted, and issues of inequity have been determined to exist, the parties should negotiate to correct the inequities, whether for individual employees or whole classifications (where an entire classification is paid on a lower scale than another despite doing substantially similar work under similar working conditions, for example.)

 

  • Increase diversity in recruitment and eliminate bias in hiring. While not typically considered a mandatory subject of bargaining, the parties could discuss and agree upon steps that could be taken during the hiring process to increase the gender and racial diversity of the applicant pool for some or all positions and departments. The parties may also negotiate about ways to reduce or eliminate the impact and influence of bias in the hiring process.

 

  • Train hiring managers on appropriate salary criteria. If the collective bargaining agreement gives managers any discretion with respect to setting starting salaries for members of the bargaining unit, the parties could agree to a training program for managers who make hiring decisions and initial pay offers to ensure that they understand what the permissible and impermissible criteria for making such decisions are and how to apply them. Where the employer has discretion in setting starting salaries, the parties could negotiate language requiring decisions about initial compensation to be based on bona fide, job-related factors. Such language could also specify that a newly-hired employee’s prior salary or salary history should not be used to set pay, and that any reliance on such factor must be documented (explained in writing) by the hiring manager.

 

  • Protect discussion of wages and discourage retaliation. The parties could negotiate contract language that makes it clear that employees may discuss their salaries with other employees and union representatives, and that management will not retaliate or discriminate against any employee for exercising their right to do so.

 

  • Evaluate new hire v. incumbent salaries. The parties could agree to language requiring the employer to evaluate the salaries of incumbent employees at any time that a new hire is provided an initial salary that is higher than theirs.

 

  • Establish objective performance evaluation process. The parties could negotiate a fair process for performance evaluations in which employees are evaluated on clear criteria based on the skills and specific tasks performed in the position.

 

  • Recognize and value employees with caregiving responsibilities. The parties could negotiate for flexible work hours that recognize the demands of childrearing and other types of caregiving while not diminishing the value that employees who are parents and caregivers bring to the workplace. The parties could also negotiate job-protected, paid parental leave and ensure that it is equally available to employees of all genders, with additional job-protected, paid leave for the parent who actually gives birth. The parties could also negotiate for child care centers at or near the worksite.

 

  • Ensure education and training for potential promotional opportunities is available to all employees. In the event that the audit finds that one reason for a pay gap between genders or between races/ethnicities is caused by more frequent promotions to one group of employees than to another, the parties could negotiate to provide training opportunities for all employees in management skills, or other skills needed for jobs that provide a promotional opportunity.

 

  • Take Proactive Steps to Avoid Occupational Segregation. In the event that the audit shows that jobs are segregated by gender, or by race/ethnicity, especially if employees of one gender or race working primarily in lower paying jobs, the parties could negotiate for the employer to provide employees with access to training and information on job openings and application processes so that employees can transfer to higher paying classifications as openings occur.
How Does The Fair Pay Act Apply to Unions
  • The Fair Pay Act covers employees in all industries in California;
  • There is no exception under the Fair Pay Act for employees covered by Collective Bargaining Agreements, and there is no minimum number of employees needed for this law to apply.
  • Unions and employers can, however, negotiate bona fide merit or seniority based systems that can be the basis for wage differentials under the law.
  • In light of the recent amendments to California law, unions may wish to review provisions in the collective bargaining agreement that relate to employee compensation – such as hiring and selection criteria, job classifications and definitions, pay scales, promotion and pay raise provisions, etc. – to ensure that these provisions comply with the law.
  • Unions and their members may wish to evaluate historical inequities in pay (e.g. between substantially similar female- and male-dominated positions) to determine potential compliance issues, especially when negotiating an initial contract.
What If A Union Member Feels They Are Not Being Paid Equally?
  • A union representative can educate members about the existence of the Fair Pay Act, and their rights under the law and that the Union has the ability to get information from the employer that could help to evaluate and address the issue.
  • Depending on the terms of the Collective Bargaining Agreement, union represented employees may have a remedy through the negotiated grievance and arbitration procedure, or the individual employee may need to seek representation from an outside attorney or file a claim with the California Labor Commissioner. (Link to “Employee Rights”).
  • A union representative may tell employees who are not already represented by the union that they have the same rights under state law but also that issues of pay equity can be, and often are, addressed in the collective bargaining process.

JOB SEARCH

Job Search

This checklist will help you to ask the right questions to get you started on your job search.
Answering these questions and using the free tools suggested above will bring you closer to
choosing the right occupation for you and to be paid fairly for the work.

About me:

  • What are my qualifications, skills, and experience (have check boxes derived from EDD’s website)?
  • What is my education level?
  • What is a reasonable salary/pay range for me to start? To earn after two years?

About jobs:

  • What kinds of jobs sound interesting to me?
  • How much do people usually earn in this job?
  • Is there a gender pay gap in this occupation?
  • Is there a demand/anticipated need for this occupation in my area and in the state?
  • Who should I talk to find out more about this occupation? (Informational Interviews? Research? Linked in? Associations?)
  • Do my current qualifications, skills, and experience already *match* the job requirements?
  • What kind of training do I need?
  • How and where do I get needed training? Community Colleges? Free online courses? How long will it take?
  • How much will the training cost?
  • Is there available public transportation to these jobs?
Where Can I Look For a Job?

The first step in a job search is deciding which job/career you wish to consider.

California’s Employment Development Department (EDD) My Next Move website will help you choose from many possible jobs based on your interests, skills, education, personality, desired salary, experience, and knowledge. If you are not sure what you want to do, EDD’s Labor Market Information for Job Seekers and Students even provides self-assessments so you can match *you* to a job or career. California Occupational Guides and Occupations in Demand will also help you find out more about which jobs are in growing fields and offer more opportunities, education/training for those jobs, and what might be the basic pay rate for new and more experienced staff. This site even tells you where those jobs are in California and specific companies that hire people in the job you want.

Another great resource is American Job Centers, where they can help you look for and apply for a job.

Salary Information

I NEED TO MAKE SURE I MAKE ENOUGH MONEY, WHAT DO I DO?

Before you even begin applying for jobs or interviewing, you’re right, you need to be aware of what possible pay ranges or options exist. Doing so will help guide your research into what training you might need to increase your earnings and other requirements for possible jobs. And, you can use pay range information when you interview and are hired to make sure you are asking for and being offered pay that is similar to people with similar jobs.

Labor Market Information on EDD’s website occupation profiles also offers basic information about potential salaries and pay rates for specific jobs. This tool is a handy way to learn about the possible income/pay rate for a job in which you are interested.

How Do I Connect With A Prospective Employer?

Networking. Networking is the key process by which people find jobs. It means asking questions and getting into conversations with everyone you can think of and anyone your personal connections can think of about their jobs.

LinkedIn. A good networking tool that also helps you organize your qualifications, skills, experience, and education is LinkedIn. LinkedIn has free services that allow you to create an employee profile about you that employers can see. It also helps you to connect with other people who are in the jobs you want so you can ask them questions and learn more about the job you want.

Informational interviews happen when you meet with a prospective employer, ask them more about the job you want, and provide them more information about you. It can be done in person, on the phone, and even via chat online.

Industry, occupation, professional, and trade organizations and associations form a very important role in networking. These organizations and associations are often national, but they do have local and regional connections. Go online and search for associations and organizations that include the occupations in which you want to work. For example, if you are interested in information technology or computers then you could look into the Women in Technology Association or National Center for Women and Information Technology. Or, if you are interested in helping professions you might look into the California Chapter of the National Association of Social Workers. If you are using LinkedIn, search for the association there and join online. Attend meetings and conferences of the associations and organizations representing the industry and occupations in which you are interested and call or message them to ask questions about the occupation and jobs.

How Do I Create a Résumé?

Do you have an up-to-date-résumé? If not, free résumé templates can guide you as you develop
your personalized resume.

Whether you are building your résumé from scratch or have one already, try signing up for
LinkedIn. LinkedIn is a social media site you can freely join, similar to Facebook, but for job
seekers and those already employed. The site prompts you to enter information about your
work experience, education, skills, accomplishments, and interests. Saving your information on
a site like LinkedIn is useful:

  • It stores your résumé information in one place easily updated.
  • You can look at other people’s profiles to think about how to create yours. 
  • LinkedIn allows you to convert your information into a résumé format.
  • You can connect with people who are already in the jobs you want.

Remember as you apply for job:

  • Keep track of the jobs you apply and any follow-up you want to do.
  • Connect your skills to a job announcement by emphasizing those skills you have that match what the employer is asking for.
  • Write a compelling cover letter. There are many websites with examples of cover letters

 

Informational Interviewing

Informational interviewing with other women in a company or occupation in which you’re interested is a great strategy to get to know a potential employer or an industry, how compensation is structured, and how different jobs are evaluated.

Acknowledging what they’ve accomplished is a great conversation starter. Start with, “You have a great reputation for being knowledgeable and experienced in your field,” or some similar observation. If you have a personal referral, that’s even better. Let your prospective employer know who you know. Ask if they have time to talk informally, “Do you have time to talk for about 15 minutes?” As they are talking about themselves the conversation often continues longer, and you have more opportunities to let them get to know you, too.

Possible or sample questions to ask and information to share during an informational interview
include:

  • How did you get to where you are today?
  • How did you start?
  • Did you have a firm idea of what you wanted to do and how to get there?
  • If not, what is the progression to get to where you are?
  • I don’t know exactly what I want to do, but the important things to me are the ability to
    contribute, to grow, and to learn. I am curious about everything. I enjoy working hard and
    taking pride in what I have accomplished.
  • What do you suggest as the most practical and effective way to find out about different careers in (general field)?
  • Is it your perspective that there is a growing demand for (occupation)?
  • Is the field already crowded?
  • Do you feel you are in the right job? The right field? How? When did you know that you were in the right job?
  • Do feel you are fairly paid? Is there a difference in how men and women are paid in (company name or industry)?
  • If you were starting over today, would you make different choices? What would you choose differently?
  • If you knew what you know now about being a (occupation) would you do it again? What do you wish you had done differently, if anything?
  • Does a person in your field need to be flexible? How? A lot? Is that an issue?
  • Is there anyone else you would suggest I speak with? What particular reason do you have in making that suggestion? Or, what should I say when I contact this person?
Information About Wages

There are many resources that employers and employees may wish to consult to determine appropriate compensation for a particular role. Please also note that job titles are not determinative but just an initial step in determining appropriate compensation for a particular role. The Task Force recommends consulting resources that provide a pay range, rather than the median compensation for a particular role. It is also recommended that more than one resource be consulted.

Possible resources include, but are not limited to:

 

 

 

  • Glass Door. Glass Door is a database of information about employers that includes salary reports submitted by both employer and employee users of the site.

 

  • Salary. Salary.com is a database that allows employers to analyze their internal pay practices against market rates.

 

  • Payscale. Database that compiles individual salary profiles through crowdsourcing and big data technologies for use by employers and employees.

 

  • SimplyHired. Calculator allows users to compare salaries with others in the same profession regionally and nationally.  Data is taken from their job listings.

 

  • America’s Career Infonet. Website, sponsored by the U.S. Department of Labor, allows users to search salary and hourly ranges by zip code and occupation category

 

The resources provided above are not an exhaustive list and the Task Force does not endorse reliance on any particular resource.  Please also note that the data provided in the resources above may change following future development in California law.

 RESOURCES

FAQs

Frequently Asked Questions

  1. What state and federal agencies enforce equal pay laws?

In California, the Labor Commissioner’s Office (also known as the Division of Labor Standards Enforcement or DLSE) has the authority to enforce Labor Code Section 1197.5, which prohibits an employer from paying any of its employees at wage rates less than the rates paid to employees of the opposite sex, or of a different race or ethnicity for substantially similar work.

See https://www.dir.ca.gov/dlse/California_Equal_Pay_Act.htm.

The Department of Fair Employment and Housing (DFEH) enforces the Fair Employment and Housing Act (FEHA), which among other things, precludes the discrimination in employment on the basis of gender, ethnicity, and race.  Paying different wages due to an employee’s gender, race, or ethnicity is considered discrimination.

At the federal level, the Equal Employment Opportunity Commission (EEOC) enforces the federal Equal Pay Act and Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act of 1967, and Title I of the American Disabilities Act of 1990, which preclude discrimination in employment, such as unequal compensation, based upon protected classifications.

 

  1. Does California law require employers to pay all employees who perform the same or substantially similar job the same wage rate?

California law requires equal wages for employees of the opposite sex, or of a different race or ethnicity, who perform the same or substantially similar work.  An employer can still adjust wages based on a seniority or merit system, a system that measures earnings by quality or quality of production, or another bona-fide factor that is job related and necessary for the business such as education, training, experience, or the geographical location of the employee and cost of living in that area. Employers may consider conducting a pay equity analysis to determine whether wages should be adjusted within their organization to comply with the law.

  1. Does an employer have to conduct a pay equity analysis of all employees’ wages?

There is no mandate to conduct an audit.  However, it may be a good practice for employers wishing to proactively comply with the law. Employers may want to consider conducting any audit with the advice of an attorney or HR professional.

 

  1. What is the liability an employer can face if there is a wage differential that cannot be explained or justified by one of the recognized or bona fide factors?

An employer could face an enforcement action by one of the above listed state or federal agencies or a civil lawsuit, and may potentially have to pay back wages, liquidated damages, lost work benefits, attorney’s fees, etc.  If there is discrimination or retaliation involved, emotional distress and punitive damages may also be assessed.

 

  1. Can an employee discuss his or her wages with other employees?

Employees can discuss wages with one another, including asking an employee about his or her wages, without discrimination or retaliation by the employer.  There is no obligation on any employee to disclose his or her wage or engage in these discussions.  Employers can take reasonable measures to protect the privacy of information regarding employees’ compensation, including prohibiting employees who have access or control over confidential wage information given their job duties and responsibilities, from disclosing such information without the consent of those employees.  However, employers should be cautious about employees’ rights under the Labor Code to report violations and to assist other employees in exercising their rights to pursue equal pay.

 

  1. Can an employer ask an applicant about his or her prior salary?

No.  California law prohibits all employers from seeking salary history information about an applicant for employment and requires employers to provide the pay scale for a position to an applicant upon reasonable request.  [For additional information—LINK TO GUIDANCE FOR ER ON SETTING STARTING SALARY]

Overview of Current California Laws

California’s Equal Pay Laws (as of September 2018)

For decades, the California Equal Pay Act (CA Labor Code Section 1197.5) has prohibited an employer from paying its employees less than employees of the opposite sex for equal work.

In October 2015, Governor Brown signed the Fair Pay Act (SB 358 – Jackson), which changed the law and strengthened our state equal pay law in a number of ways, including:

  • Prohibiting unequal rates of pay for employees of the opposite sex who perform “substantially similar work,” instead of “equal work;”
  • Eliminating the requirement that employees’ wage rates only be compared to those of other employees working in the same physical location or office (the “same establishment”);
  • Making it more difficult for employers to justify paying an employee of one sex less than another when they do substantially similar work by narrowing the defenses available;
  • Requiring that whatever factors an employer relies on to justify a difference in pay (like different levels of education, training, or experience) be job-related, used reasonably, and account for the entire pay difference;
  • Specifically making it illegal to retaliate or discriminate against employees who discuss or ask about pay, or take some step to enforce their own or a co-worker’s equal pay rights; and
  • Extending the number of years that employers must maintain records related to pay from two to three years.

 

In September 2016, Governor Brown signed the Wage Equality Act of 2016 with further amendments (SB 1063 – Hall and AB 1676 – Campos) to the Equal Pay Act including:

  • Adding race and ethnicity to the Equal Pay Act and thereby prohibiting employers from paying employees of one race or ethnicity less than employees of another race or ethnicity for substantially similar work.
  • Amending the Equal Pay Act to bar employers from relying on an employee’s prior salary (by itself) to justify unequal pay between employees doing substantially similar work.

 

In October 2017, Governor Brown signed two further amendments to the law (AB 168 – Eggman and AB 46 – Cooper) which take effect on January 1, 2018:

 

  • Prohibits all employers — including the Legislature, the State, and local government agencies — from seeking salary history information about an applicant for employment and requires employers to provide the pay scale for a position to an applicant upon reasonable request.
  • Declares that the Equal Pay Act also applies to public sector employers, including the State itself, by defining “employer” to include both public and private employers.

 

 

Statutory History of Equal Paw Laws in California and the U.S.

Statutory History of Equal Pay laws in

California and the United States

 

California first passed an Equal Pay Act in 1949.  Before the Fair Pay Act of 2015 was enacted, Labor Code section 1197.5 provided that:

 

No employer shall pay any individual in the employer’s employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions . . . .

 

Exceptions to this prohibition were made for wages paid pursuant to systems of seniority, merit, or that measure earnings by quantity or quality of production; or differentials based on any bona fide factor other than sex.  Enforcement was by the California Labor Commissioner.

 

Effective January 1, 2016, the “Fair Pay Act of 2015” expanded California’s Equal Pay Act by removing the requirement that the pay differential be within the same “establishment,” and replaced the “equal” and “same” job, skill, effort, and responsibility standard, with a new standard that only requires a showing of “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” These changes make it easier for an employee to bring an equal pay suit, permitting a plaintiff to compare him or herself with employees of the opposite sex working at any location for the same employer, and in any similar job.

As amended, California’s Equal Pay Act further requires employers to affirmatively demonstrate that any wage differential is based entirely and reasonably upon one or more factors.  Added to the three existing factors (seniority, merit, or production-based) is a “bona fide factor”: that is, a factor not based on or derived from a sex-based differential in compensation, which is related to the position in question and is consistent with a “business necessity” (defined as “an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve”). The “bona fide factor” defense is inapplicable if the plaintiff demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential. With the enactment of SB 358, California Labor Code section 1197.5 (a) now provides:

 

(a)  An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates:

(1) The wage differential is based upon one or more of the following factors:

(A) A seniority system.

(B) A merit system.

(C) A system that measures earnings by quantity or quality of production.

(D) A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, “business necessity” means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.

(2) Each factor relied upon is applied reasonably.

(3) The one or more factors relied upon account for the entire wage differential.

 

California’s Equal Pay Act was amended again in 2016 by Wage Equality Act of 2016 (SB 1063).  Effective January 1, 2017, California’s equal pay law also prohibits unequal pay for employees of different races or ethnicities.  Labor Code section 1197.5(b), now provides in pertinent part:

 

An employer shall not pay any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions . . .

 

California’s Equal Pay Act was again amended in 2017 (AB 168 – Eggman and AB 46 – Cooper) to specify that this act applies to public and private employers.  Also, AB 168 added Section 432.3 to the Labor Code, which provides, in pertinent part:

 

(a) An employer shall not rely on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.

(b) An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant for employment.

(c) An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.

 

Both bills became effective January 1, 2018.

 

The federal Equal Pay Act was passed in 1963 (Pub.L.  88-38; 77 Stat. 56). This act amended the Fair Labor Standards Act of 1938, as amended (29 U.S.C. et seq.), by adding a new subsection (d).

 

(d) (1) No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex: Provided, That an employer who is paying a wage rate differential in violation of this subsection shall not, in order to comply with the provisions of this subsection, reduce the wage rate of any employee.

 

The Department of Labor had responsibility for enforcement of the federal Equal Pay Act until the federal Reorganization Plan No. 1 of 1978, which, as of July 1, 1979, shifted responsibility for enforcing both the Equal Pay Act and the Age Discrimination in Employment Act from the Labor Department to the Equal Employment Opportunity Commission. https://www.eeoc.gov/eeoc/history/35th/thelaw/epa.html

 

 

Statutory History of Employment Discrimination Laws in California and the United States

 

California’s and the federal equal pay laws have always been distinct from laws generally prohibiting employment discrimination.  California’s Fair Employment Practice Act enacted in 1949 prohibited employment discrimination because of race, religious creed, color, national origin, or ancestry, and did not prohibit sex discrimination. Sex was added as a prohibited basis of discrimination in 1970 (Cal.Stats. 1970, ch. 1508).  Enforcement was through the Fair Employment Practice Commission, later named the Fair Employment and Housing Commission.  The Commission was abolished in 2012.  Since that time enforcement responsibility rests solely with the Department Fair Employment and Housing.

 

Title VII of the federal Civil Rights Act of 1964 (Pub. L. 88-352) prohibited race, color, religion, sex, or national origin discrimination in employment (42 USC Sec. 2000e).  The administrative agency responsible for enforcement of Title VII is the Equal Employment Opportunity Commission.

In 1965, President Johnson issued Executive Order 11246.  This Executive Order, as amended by subsequent orders, currently prohibits federal contractors and federally–assisted construction contractors and subcontractors, who do over $10,000 in Government business in one year from discriminating in employment decisions, including compensation, on the basis of race, color, religion, sex, sexual orientation, gender identity or national origin.  Further information about this Executive Order is available at OFCCP [insert link].

Information About Wages

There are many resources that employers and employees may wish to consult to determine appropriate compensation for a particular role. Please also note that job titles are not determinative but just an initial step in determining appropriate compensation for a particular role. The Task Force recommends consulting resources that provide a pay range, rather than the median compensation for a particular role. It is also recommended that more than one resource be consulted.

Possible resources include, but are not limited to:

 

  • Department of Labor Bureau of Labor Statistics: Occupational Outlook Handbook. Provides information about the characteristics of various jobs, the skills, education and training required for them, typical salaries and future outlook for the occupation. It is organized by job family. See http://www.bls.gov/ooh/.

 

  • The Department of Labor Bureau of Labor Statistics: O*Net Online.Deep database that provides job related info by a number of different search techniques, such as industry, occupation growth rates, level of training and preparation needed (job zones) and other characteristics. See https://www.onetonline.org/ .

 

  • Glass Door. Glass Door is a database of information about employers that includes salary reports submitted by both employer and employee users of the site. See https://www.glassdoor.com/index.htm.

 

  • Salary. Salary.com is a database that allows employers to analyze their internal pay practices against market rates. See http://www.salary.com/.

 

  • Payscale. Database that compiles individual salary profiles through crowdsourcing and big data technologies for use by employers and employees. See http://www.payscale.com/.

 

  • SimplyHired. Calculator allows users to compare salaries with others in the same profession regionally and nationally.  Data is taken from their job listings. See http://www.simplyhired.com/

 

 

The resources provided above are not an exhaustive list and the Task Force does not endorse reliance on any particular resource.  Please also note that the data provided in the resources above may change following future development in California law.

Glossary

Glossary coming soon. 

DISCLAIMER: The materials provided on this web site are for informational purposes only and not for the
purpose of providing legal advice. You should contact an attorney to obtain legal advice about
any particular issue or problem. The materials do not represent the opinions or conclusions of individual members of the Task Force. The posting of these materials does not create requirements or mandates.