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California Equal Pay Act Applicable to Both Private and Public Employers

The California Fair Pay Act, Senate Bill 358, was approved by Governor Brown on October 6, 2015 and will take effect January 1, 2016. The bill modifies California’s existing equal pay laws (Labor Code section 1197.5) in the following ways:

1. Existing law prohibits employers from paying any employee less than another employee of the opposite sex “in the same establishment for equal work.” The law as amended broadens the scope by eliminating the “same establishment” requirement and changing “equal work” to “substantially similar work.”

2. Existing law provides exceptions or affirmative defenses for wage differential if the employer can show the differential is due to “a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.” The law as amended limits the “bona fide factor other than sex” exception by providing examples “such as education, training, or experience” and requiring the employer to demonstrate that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position, and is consistent with a business necessity.

3. Also, the employer must now show that each factor relied upon is applied reasonably and that the one or more factors relied on account for the entire wage differential.

4. Finally, the law as amended adds subsection (j) to Labor Code section 1197.5, which discourages pay secrecy prohibiting retaliation or discrimination against employees who disclose, discuss, or inquire about their own or coworkers’ wages for the purpose of enforcing their rights.

Essentially, the law can now be applied to employees working for the same company or public entity that have different job descriptions and work in different locations; the exceptions and affirmative defenses available to employers are more limited and difficult to prove; and more protections are put in place to allow employees to discuss their wages.

If you have any questions about how the California Equal Pay Act may affect your business or district please contact us 619-564-8400

Nitasha Kaur Sawhney specializes in education, labor and employment law. Nitasha serves as legal counsel to public school districts, community college districts, charter schools and other educational institutions. 

Nadia P. Bermudez specializes in employment litigation, counseling and general business litigation. She advises employers throughout all stages of the employment relationship.