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Advancing Toward Fairness: the Fair Pay Act of 2016

June 26, 2016

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"Fairness is what justice really is."
-- U.S. Supreme Court Justice Potter Stewart

Women earn less money than men. That is a truism of American life. A 2015 study showed that women make 79 cents for every dollar made by men. Substantial gender-based wage gaps exist in every single profession in which statistically significant samples were available. See http://www.iwpr.org/initiatives/pay-equity-and-discrimination

California is no different. A recent study by the Census Bureau showed that women make about 84 cents for every dollar made by men in the Golden State.

California, however, has decided to blaze the trail in correcting this problem. In January, California's Fair Pay Act went into effect. That statute has tremendous protections for California's workers, and may help make significant inroads into this ongoing issue.

1. Substantial Similarity

Previously, California law prohibited paying women less only for equal work within the same facility. The Fair Pay Act does away with the "equal work" requirement in favor of a "substantially similar work" standard.

"Substantially similar work" is well-defined within the statute. Work is viewed as a "composite of skill, effort and responsibility," as well as "similar working conditions."

The effect of this part of the law is huge. It expands the pool of your colleagues to which your attorney may compare you to prove gender discrimination. In other words, employees with different titles but doing a substantially similar job can no longer be paid differently because of their sex.

2. Remedies

Although the Fair Pay Act provides that it is to be administered by the Division of Labor Standards Enforcement ("DLSE," or the "Labor Commissioner"), that State agency is notoriously overworked. If left to the State, the statute would go largely unenforced.

That's why the Fair Pay Act allows people to sue on their own, providing for what we call a "private right of action." Violations of the Fair Pay Act will cause an employer to pay the difference in wages going back 2 years (3 years in case of a willful violation), an equal amount to that as liquidated damages, interest, and attorney's fees.

3. Non-Waivable Right

You can't give up (or "waive") your right to be paid fairly and without discrimination. The Fair Pay Act provides that being paid the same regardless of your gender is a non-waivable right.

4. Employer's Defenses

The act does provide a defense for employers, but it's a demanding one. An employer won't be liable for wage inequality on the basis of gender if it can show a non-gender-based reason for the difference. These reasons can include a seniority system, a merit-based system, or measurements of production quality or quantity.

Other factors can legitimize a pay difference, such as difference in educational, experience, or training level. There are other strict requirements even for this, though: the reason can't be derived from a sex-based difference, and it must be necessary for the business. Even then, the employee can overcome this defense by demonstrating that the employer could have done something different that would have eliminated the wage difference.

There has been a lot of discussion in legal circles about this new law. Similar wage differentials exist based on race and disability; perhaps the law will be amended to include these protected characteristics as well. Meanwhile, California leads the charge in promoting fairness based on sex in the workplace. The statistics show we have a lot of work to do, but our State can be rightfully proud of this effort.

 

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