1. Title VII of the Civil Rights Act of 1964 does not allow employers to set pay based on sex (or race or other protected criteria). So, if a restaurant employer paid female servers $0.50 per hour less than male servers, that would violate Title VII absent a "legitimate, nondiscriminatory business reason." The workers must be "similarly situated."
2. The California Fair Employment and Housing Act is analogous to Title VII.
3. The federal Equal Pay Act of 1963 (here) (yes, enacted a year earlier than Title VII) provides:
(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.4. And the California Labor Code, section 1197.5 already says:
1197.5. (a) 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, except where the payment is made pursuant 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.That said, and dissatisfied with the "wage gap" that exists between the wages earned by all men and all women in all jobs (which has nothing to do with the equal pay laws), the Legislature has modified section 1197.5, intending to strengthen it.
Here is the text of the new law's equal pay provisions:
1197.5. (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:The key changes are:
(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.
- "substantially similar" work rather than equal work. What does "views as a composite of skill, effort, and responsibility" mean? This will be the subject of litigation.
- the employee need not compare herself to others only within the same location, but may look to other job sites. This change likely expands the new law beyond all four laws discussed above. When employers have multiple facilities and pay different rates based on location, this section could result in claims of pay disparity. It is still lawful to do pay geographic differentials as far as I know. But employers will have to ensure that wage differentials based on geography are applied equally and do not create sex-based disparities.
- the employer has to prove that wage disparities based on factors "other than sex, such as education, training or experience" are job-related, consistent with business necessity, and that the employee cannot prove a less discriminatory alternative.
- the court / jury gets to decide if the employer's reason for wage disparities are "reasonable."
- the employer must prove the entire wage disparity is due to one or more of the defenses.Other major changes:
- Recordkeeping under this section goes from 2 years to 3.
- It is already the law (in the Labor Code, even) that an employer cannot prohibit an employee from disclosing her own wages or discussing wages at work. But this new law prohibits employers from preventing employees from "inquiring about another employee's wages" or "aiding or encouraging any other employee to exercise his or her rights under this section." However, the new law says that it does not require anyone, including the employer, to disclose others' wages. There is no exception for payroll or HR workers who may "discuss the wages of others" under this new law. So, can the payroll manager chat with Sally about Bob's pay? It also will be interesting to see if this law is preempted by the National Labor Relations Act, which also covers this area.
- New private rights of action and remedies for violations. However, these existed in one form or another under the old laws as well.Effective date and final thoughts:
This law takes effect on January 1, 2016.
Employers will have to revise payroll and confidentiality policies before then. It will also serve employers well do analyze compensation systems to ensure that wage disparities are justified in accordance with the defenses stated above.
Oh, and this law will do little to nothing to address the "wage gap" that you may have read about, or heard Patricia Arquette discuss at the Oscars. That wage gap is a function of the average wage paid to women for all jobs compared with the average wage paid to men. It's not a comparison of men and women doing the same job for the same employer.
If the politicians want to pass a law to address the overall wage gap and stop using it as a political talking point, they can do so. But they will have to pass a law that sets wages for male-dominated occupations lower, set wages for female-dominated occupations higher, and/or somehow balance the mix of males and females in each job category. I have to go now. I have an appointment in Room 101.
Finally finally, I think the law actually has a typo in it. The usual way one refers to the commencement of the statute of limitations is when the cause of action "accrues." This law reads, at least on the internet, and as of right now:
A civil action to recover wages under subdivision (a) may be commenced no later than two years after the cause of action occurs.(emphasis mine). I make typos too. But I don't pass landmark legislation that affects millions of Californians.
