What is the Law and How am I Affected?

For decades now, the California Equal Pay Act has prohibited employers from paying its employees less than employees of the opposite sex for equal work.  However, in 2015, Governor Brown signed the California Fair Pay Act, which strengthened the Equal Pay Act in a number of ways and signaled California’s commitment to achieving real gender pay equity.  Despite this, wage gaps are still a very frustratingly real obstacle, with women and people of color statistically making less than their male counterparts in the same positions.  According the National Partnership of Women and Families, women in California lose $87 billion to the pay gap every year.

Understanding the changes to the California Fair Pay Act and what they mean for you is essential to ensuring you are receiving a fair wage. Below, we review these updates and how you can learn to recognize if your boss may be violating them.

Equal Versus Substantially Similar

Previously, for the Equal Pay Act’s terms to apply, two jobs’ work must be considered “equal.” In other words, you and your colleague must both have the same title job with the exact same job responsibilities for the equal wage laws to apply.

As of 2016, jobs need only be “substantially similar,” a lower threshold than “equal.” This means that not only do the job titles not have to be same, the responsibilities must only be comparable instead of identical.

The following factors contribute to establishing “substantially similar” work:

• Skill – experience, education, ability, and training
• Effort – physical and mental exertion required to competently perform job duties
• Responsibility – the extent of your position’s accountability or scope of work responsibilities
• Working Conditions – physical conditions of your work environment, including any hazards

Sometimes you and a coworker may perform substantially similar work even if it is not immediately obvious. Say you are a woman employed as a “coordinator” at a marketing agency office. Your male peer is a “manager.” While your titles differ – and your male colleague’s title might even sound more important – your job responsibilities are extremely similar, to the extent you often divide and conquer tasks from the same pool of work assignments. Despite the fact that you each have a different title, there is a good chance you are entitled to the same salary as your male peer in this scenario. Both of your jobs require a similar level of skill, effort, and responsibility, with near-identical working conditions.

Title discrepancies can be a major factor in concealing wage gap violations. Offending employers can provide a different title to justify a higher salary for a particular employee, even if their work is substantially similar to others who are being paid less. You should pay attention to situations where an employee has an important title but otherwise appears to have the same work responsibilities as you.

Elimination of the “Same Establishment” Rule

Another major change that the 2015 update to the California Equal Pay Act dealt with internal versus external workplaces. Prior to the amendments, wage gap laws only applied when considering peers within a single workplace, or the “same establishment.”

As of 2016, the clause requiring employees only compare compensation within the “same establishment” has been eliminated.This can be helpful if you work for a larger company with multiple branches, offices, or worksites. Previously, employers could leverage loopholes by assigning employees earning less than they should to a different office or location. Now, the “substantially similar” work threshold applies across all of a business’s employees, no matter where they are physically located.

Introduction of Race and Ethnicity Rules

As of 2017, California amended the Equal Pay Act to make race and ethnicity protected classes.  This means that employers cannot pay an employee less than another employee of a different race or ethnicity if they are engaged in substantially similar work. The extent and definitions of the protections for race and ethnicity are identical to those governing sex.  As of 2018, the Equal Pay Act covers public employers.

Asking About Salary Priors

In the past, employers could potentially lowball compensation offers by asking about what you made at your previous jobs during the interview process. This practice has historically entrenched the wage gap. Women, for example, have statistically made less than men, so asking for their prior earnings will naturally produce a salary range lower than what an employer might have been prepared to offer a man for the same role. Even if the employer makes an offer slightly above what the person previously earned, the value still may be well below the typical salary range for the position.

As of 2018, the Equal Pay Act was amended to prohibit employers asking about earlier salaries.An employer may no longer ask you about what you made at your previous jobs at any point during the interview process.

It is important to note that an employer is not liable should you volunteer your prior salary information. An employer cannot insinuate or suggest you offer this information: You must choose to do so of your own volition.

Generally, it is not advantageous to offer your prior salary information, unless the employer is offering you an insufficient compensation package and you are seeking to negotiate upward. For example, if a prospective employer is offering you only $85,000, but you received $100,000 in a similar position the year previous, it might be smart to bring up the disparity as a means of negotiation.

Conversely, were you to volunteer you previously made $100,000 before any offer is made, you have placed yourself at a disadvantage. Your employer might have been willing to offer a salary of $120,000 but may now be inclined to only offer $110,000.

There is a major caveat to keep in mind: An employer may not violate the other rules of the Equal Pay Act, no matter what prior salary information is or is not disclosed.An employee cannot be paid less than another employee of another sex, ethnicity, or race if they are doing substantially similar work. This can apply to situations where someone was being severely underpaid at a prior position.

For example, assume you are a woman who was getting paid $60,000 at your previous job. A new position at a different company is hiring, and you volunteered your salary prior information. Your new employer may attempt to seem like they are giving you a substantial raise with an $80,000 compensation package. However, what they are not telling you is your male peers doing substantially similar work get paid $100,000, and they are offering you less because they believe you will not question such a substantial jump in pay. This is still a violation of the Equal Pay Act, even though you received a major pay bump.

Can I Ask About the Pay Scale for A Particular Job I am Applying For?

When a company is seeking to hire for a new position, they have some expectation of what they plan to pay the new employee. This is called a “pay scale.” The number is usually decided on the basis of what previous employees in the role have made and the scope of the job responsibilities. Often, it is a range, scalable by the level of experience a prospective candidate could bring to the company.

As of 2018, the Equal Pay Act requires employers to disclose the internal pay scale for a position upon “reasonable” request from a prospective employee.“Reasonable” has been determined to mean once an employee has undergone an initial interview with the employer and is continuing in the process. Leveraging this right can help you avoid issues with the wage gap, as employers are required to tell you the legitimate pay scale that applies to all candidates.

Can I Ask My Fellow Employees How Much They Make?

Yes, you can ask your peers in your workplace how much they make. They are not required to tell you if they do not feel comfortable doing so.

Your employer may attempt to dissuade or even intimidate you from discussing compensation levels with your peers. Understand this is unlawful and can even be a form of retaliation. Your employer cannot fire you, demote you, give you unfavorable work assignments, or reduce your hours as a result of asking your colleagues about their compensation.

You are also allowed to ask your boss about wages for your peers, including the compensation packages of individual employees. The California Equal Pay Act does not require your boss to comply, but you are legally protected from retaliation should you ask.

What Do I have to Do to Prevail on My Equal Pay Act Claim?

Under the current law, you must prove that you are being paid less than an employee or employees of the oppositive sex, of another race, or of another ethnicity who is performing substantially similar work.  Once an employee makes this showing, the employer must then prove that it has a legitimate reason for the pay difference.

What Defenses Does an Employer Have for a Difference in Wages?

An employer can defeat an Equal Pay Act claim by providing that the difference in pay for substantially similar work is due to:

• Seniority
• Merit
• A system that measures production and/or
• A “bonafide factor other than sex, race or ethnicity.  (Bona fide factors can include education, training or experience, among other factors.)

In addition, the employer must show that it applies the above factor(s) reasonably and that the factor(s) account for the entire difference in wages.  Under the Equal Pay Act, as amended in 2019, an employer may not justify any pay difference between employees of the opposite sex, or employees of a difference race or ethnicity based on an employee’s prior salary.  An employer may make a compensation decision based on the a current employee’s existing salary, however, any wage differential resulting from that compensation decision must be justified by one more of the factors listed above.

Are Employers Still Exploiting Loopholes Despite These Equal Pay Act Changes?

Unfortunately, yes.  While the expansions to the California Equal Pay Act over the past several years have helped protect numerous employees, some employers still fail to follow the rules. The wage gap still exists, and you are entitled to what you are owed regardless of your sex, race, or ethnicity.

At Salusky Law Group, we can help evaluate the facts of your situation to determine if you have a case and do everything in our power to make sure your employee rights are honored.

What Do I Receive If I Prevail on My Equal Pay Act Claim?

Under the Equal Pay Act, an employee can recover the difference in wages, interest and an equal amount as liquidated damages.  If an employee files a case in court, her or she can also recover attorney’s fees and statutory costs.