The Institute for Women’s Policy Research published a fascinating study in November 2018 that revealed that the gap between the pay women and men receive is more serious than traditional data has shown. Using a sophisticated, multi-year analysis that considered periods of time when people were out of the labor market or worked part-time, the authors concluded that instead of the usual figure cited based on government data that women earn 80 cents on the dollar as compared with men, 49 cents on the dollar is more accurate.
You can view the entire study in detail here.
California’s Equal Pay Act
Our state is recognized nationally for being on the cutting edge of wage and pay equality in policy and legislation. California has long required equal pay between the genders through the state Equal Pay Act. In the past few years, the legislature has strengthened the law through amendments.
Basically, the Equal Pay Act forbids state employers from paying unequal wages between employees of different sexes (as well as different races or ethnicities) for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions,” according to the state Department of Industrial Relations website.
The law compares the nature of the work itself, not just the job titles. In addition to actual dollars paid, the law considers unequal job benefits or other kinds of compensation.
Some of the main provisions of the Act include:
- An employer may not retaliate against an employee who takes action under the law.
- The employer must allow employees to ask about or discuss wage levels of other workers.
- Prior salary amounts may not be the reason for unequal wages.
Employer response
Once the worker establishes unequal pay, the employer can show if it has a “legitimate reason” for the difference, which could include the following factors:
- Merit
- Seniority
- Productivity
- Another job-related “bona fide factor” not “derived from a sex-based factor” that is “consistent with a business necessity” – for example, education, experience or training
The legitimate reason for unequal pay must be reasonably applied and be the entire reason for the wage differential.
Employer compliance
A California employer should work with an experienced lawyer to understand how to comply with the Act. The DIR website provides guidance, materials and resources for employers that the California Commission on the Status of Women and Girls’ Pay Equity Task Force developed to help employers with compliance.
Our law firm is happy to provide advice and training to Northern California employers to help them proactively meet legal requirements for equitable pay rates among employees.