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New Employment Laws Affecting California Employers Effective January 1, 2016 Part II

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The materials contained herein are for information purposes only and not for the purpose of providing legal advice. For advice about a particular problem or situation, please contact an attorney.

California Fair Pay Act Mandates Equal Pay For Substantially Equal Work. The California Fair Pay Act expands prior equal pay laws by permitting claims to be based on employee wage rates in any of the employer’s facilities and different job categories, so long as the work in questions is substantially similar.

 

Effective January 1, 2016, California employers are prohibited from paying employees of the opposite sex lower wages for: “[S]ubstantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” Once a claim has been made, the burden shifts to the employer to demonstrate that wage disparities between sexes is reasonably based upon an existing written seniority system, merit systems, a system which ties wages to quantity or quality of production, or any other bona fide factor other than sex. The employer must also demonstrate that the applicable accounts for the entire differential in wages. The Fair Pay Act further prohibits employers from preventing employees from disclosing or otherwise discussing their wages with other employees. The Act also increases the the time employers are required to maintain records of employee pay (and the aforementioned defense factors) from two (2) to three (3) years.

Immediate Action Recommended: Identify differences in pay paid to employees who perform substantially similar work. Look to ensure that all job descriptions are current and accurately reflect job titles, duties and responsibilities. Train supervisors to be aware of the new law and direct them to help identify potential issues. Document the reasons why pay differences exist, and consult with an employment attorney to help create documentation should sex based pay differences be identified.

Should you have questions concerning the minimum wage, please contact Doug Wade at (714) 453-9144 or email doug@dmwadelaw.com.

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