New California Law Calls for Equal Pay for Women: Understanding Your Rights
From Robin Wright making news for demanding the same pay as her ‘House of Cards’ co-star Kevin Spacey to the U.S. Women’s National Soccer Team filing an EEOC charge for pay discrimination, equal pay is having a moment–and California’s equal pay laws are no exception. On January 1, 2016, California’s Fair Pay Act took effect to strengthen the state’s existing equal pay laws and provide additional protections designed to end the gender pay gap.
Gender Wage Gap in Silicon Valley
It came just in time. Although some may like to think of Silicon Valley as a meritocracy where talent reigns supreme, the center of tech innovation is grappling with a persistent wage gap. Women in Silicon Valley with a college degree earn just $0.75 for every dollar earned by male coworkers with similar education and experience, and women with a graduate degree earn just $0.73 for every dollar earned by male coworkers.
Just how bad is that disparity? On average, the wage gap works out to an additional $1,667 per month for male employees with college degrees. That’s $20,000 per year. Over 50 years of work, that’s $1,000,000. And it’s worse for women with graduate degrees. On average, male employees with graduate degrees in Silicon Valley earn an additional $3,333 per month, or $40,000 per year – $2 million over a 50-year career.
And that’s just a comparison between all women and all men. Women of color have it worse than anyone – for example, Latina women in California make only $0.44 for every dollar a white male makes. That’s the biggest gap for Latina women in the nation.
So what does California’s new Fair Pay Act do about it?
California’s New Fair Pay Act
Although California has had the Equal Pay Act on the books since 1949, the wage gap has persisted. California’s new Fair Pay Act amends the old law in a few notable ways.
Under the new law, employees who perform “substantially similar work” must be paid the same amount. The old law required equal pay for “equal work,” which made it easier for employers to claim that jobs with different titles or job descriptions–but that required the same types of job tasks–were not “equal.” Now, employers must consider a “composite of skill, effort, and responsibility” and whether the work is performed under “similar working conditions” when determining compensation. Cal. Labor Code § 1197.5(a).
While the law is still relatively untested, the wording of the Fair Pay Act suggests that this “substantially similar work” requirement applies even across different office locations. The original law required equal pay only within the “same establishment,” but the new law eliminates that requirement. So, a female employee in Oakland doing substantially similar work as her male counterpart working for the same company in Berkeley (or perhaps even Los Angeles or San Diego) may have recourse under the Fair Pay Act.
When Can Pay Be Different?
There are still circumstances under which male and female employees may be paid differently despite performing substantially similar work. Employers may claim “affirmative defenses” under the Fair Pay Act to justify differences in pay based on:
- a seniority system
- a merit system
- a system that measures earnings by quantity or quality; or
- a bona fide factor other than sex, such as education, training, or experience.
To successfully argue an affirmative defense, the employer must prove that the difference in pay is not based on sex, is related to the position, and that there is a business necessity. For example, it may be permissible for an employer to pay a male employee more than a female employee if he has an advanced degree that the female employee does not possess—but only if the advanced degree is related to the position (i.e. the employer likely could not justify a pay differential for janitorial staff based on the fact that a male employee held an advanced degree).
If an employer argues a bona fide factor other than sex, the employee also has an opportunity to rebut the employer’s showing and demonstrate that an alternative business practice exists that serves the same business purpose without any wage differential.
How Can Employers Comply with the Fair Pay Act?
One might think that employers could comply with the new law by simply paying their male employees less, but the Fair Pay Act bars that possibility. Under Cal. Labor Code §1199.5, employers cannot reduce the salaries of male workers in order to alleviate a gender wage gap.
How Do I Know If I’m Being Paid Less Than My Coworkers?
It used to be a lot harder to find the answer to that question, as social norms and the fear of retaliation often kept people from asking coworkers about their salaries. The Fair Pay Act, however, explicitly allows employees to talk to each other about their wages and ask their employers about wages. It also prohibits retaliation by employers against employees for exercising their right to seek information about wages. Note, however, that the law does not require anyone to discuss their pay.
What If My Employer Is Violating The Fair Pay Act?
If you believe your employer is paying you less than your coworkers on the basis of your gender, you have the right to file a claim with the California Division of Labor Standards Enforcement. You also have the right to file a claim in civil court against your employer. In either case, a successful claim may mean your employer could be required to pay your lost wages, plus interest, and “liquidated damages” in an amount equal to your lost wages. They may also have to pay your attorneys’ fees and costs. Cal. Labor Code § 1197.5.
Employers that willfully pay employees differently based on gender may face fines of up to $10,000 for a first offense and up to 6 months of jail time for a second offense. Cal. Labor Code § 1199.5.
If you believe you are being paid unfairly due to your gender or you would like more information about your legal options, contact a San Francisco employment lawyer today.