California may have the most stringent equal pay law in the country. While California has prohibited unequal pay based on gender for more than 60 years, unequal pay based on race and ethnicity is now also outlawed.

Under the Fair Pay Act, an employee only needs to show that the work was “substantially similar work when viewed as a composite of skill, effort, and responsibility.” This means that employees who perform “similar” work can be compared regardless of their job titles.

An employee is permitted to compare themselves to coworkers working at any location of the employer.

Finally, the Fair Pay Act specifies that the employer has the burden of proving that any differential in wages is the result of a seniority system, a merit system, a system measuring earnings by production quantity or quality of production, and/or a differential based on any bona fide factor other than sex (such as education, training, or experience). These factors must be “applied reasonably” and must account for the “entire” wage differential.  Moreover, the “bona fide factor” exception applies only if the employer proves “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.” But even so, the bona fide factor does not apply if the employee provides an alternative business practice that would serve the same business purpose without producing the wage differential.

The new law imposes other obligations on employers as well. It prohibits employers from retaliating against an employee who discloses her or his own wages, discusses wages, or inquires about wages of other employees – and authorizes a new civil cause of action against employers who do so. The law also expands the employer’s recordkeeping obligations from two to three years for records of employees’ wages and wage rates, job classifications, and other terms and conditions of employment.

If you suspect or have confirmed that you are being paid less than your male counterparts or employees of another race, give us a call at 888-872-8065. We have extensive experience and are happy to discuss your compensation issues with no obligation. All calls are confidential.