Gov. Brown Signs the “Fair Pay Act” Thereby Strengthening Equal Pay Protections Under Existing Law
On October 6, 2015, Gov. Brown signed Senate Bill (SB) 358 (the “Fair Pay Act”). The new law will take effect on January 1, 2016 and will be one of the strongest equal pay laws in the nation.
Under existing law employers were prohibited from wage rate differentials based on sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility. Existing law also recognized exceptions to the prohibition where the payment is made pursuant to a seniority system, a merit system, system that measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.
The Fair Pay Act changes existing law as follows:
- Eliminates the requirement that the pay differential be within the same establishment.
- Replaces the terms “equal work on jobs the performance of which requires equal” skill, effort, and responsibility with “substantially similar work, when viewed as a composite of” skill, effort, and responsibility.
- Revises exceptions to require that employers affirmatively demonstrate that a pay differential is based upon one or more specified factors, including, a seniority system, merit system, system that measures earnings by quantity or quality of production, a bona fide factor other than sex such as education, training, or experience.
- Requires employers to demonstrate that factors relied upon are applied reasonably, and that the one or more factors relied upon account for the entire differential.
- Supplements existing law which prohibits employers from banning wage disclosures and retaliating against employees for engaging in this activity to make it unlawful for an employer to ban employees from “discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under” the Fair Pay Act.
- Adds the provision making it unlawful for employers to “discharge, or in any manner discriminate or retaliate against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement” of the Fair Pay Act.
- Extends the time period for keeping records related to employees’ terms and conditions of employment (including but not limited to employees’ wages and job classifications) from two to three years.
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