This article looks at what the Fair Pay Act is and at two major changes to it that just came into effect.
California’s Fair Pay Act is a relatively new piece of legislation that only went into force at the beginning of 2016. Designed to close the pay gap between men and women, the law is already being expanded to introduce new protections against wage discrimination. On January 1, the law will also prevent wage discrimination on the basis of race or ethnicity or on the basis of salary history. Unlike other pieces of employment legislation, the Fair Pay Act applies to all workplaces in California no matter their size, which means that employers should be aware of how the changes to the law may affect them.
What is the Fair Pay Act?
The Fair Pay Act requires California employers to pay male and female employees the same salary if they do “substantially similar” work. As the San Diego Union-Tribune reports, while wage discrimination on the basis of gender has long been illegal, previous laws against such discrimination were generally interpreted to mean that a male and female employee had to have the exact same job position and job title to be paid the same. The Fair Pay Act, by mandating that female and male employees be paid the same for “substantially similar” work, is much broader in scope. The law does allow for pay disparities between individual female and male employees, but those disparities have to be justified on the basis of factors other than gender, such as experience or education.
Expansion of the law
On January 1, 2017, two major changes to the Fair Pay Act came into force. The first essentially expands the protections that the Fair Pay Act afforded to female employees to employees of different races and ethnicities as well. In other words, employers will now have to pay two employees who are of different races or ethnicities the same amount if they perform “substantially similar” work. Again, exceptions are made if the difference in wages is based on factors other than race or ethnicity.
Secondly, as KPCC reports, the law also now prohibits employers from using a prospective employee’s salary history as the basis on which they determine their pay. This protection is to prevent wage discrimination that may have existed at a previous workplace from being perpetuated at a new job. Employers will still be allowed to ask potential employees about their salary history, but only so that they can use such information to be sure that they are still offering salaries that are in accordance with market rates.
California has some of the toughest employment laws in the country. For businesses, that means staying on top of the state’s changing laws can be a challenge. Fortunately, a law firm that is experienced in business and employment law can help employers either avoid disputes in the first place or deal with them quickly and effectively if they do arise.