California Fair Pay Act: Another Aggressive Step Towards Eliminating The Glass Ceiling

Written by Galen T. Shimoda and Erika R. C. Sembrano

In 2014, a woman who worked full-time year round earned an average of eighty-four cents ($0.84) for every dollar a man earned. Senate Bill 358 further noted that women working full time in California lose approximately $33,650,294,544 each year due to this wage gap.

On or around October 6, 2015, the California Governor signed into law Senate Bill 358, also referred to as the California Fair Pay Act (FPA). This new law makes amendments to California Labor Code section 1197.5 in response to the sex-based wage gap problem.

According to the FPA, an employer will not be able to pay an employee at wage rates less than the rates paid to employees of the opposite sex if the employee does "substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions."

However, an employer may do so only if it demonstrates the following:

  1. The wage differential is based on one of more of the following:
    1. a seniority system;
    2. a merit system;
    3. a system that measures earnings by quantity or quality of production;
    4. a bona fide factor other than sex, e.g. education, training, experience. [This factor only applies if the employer demonstrates that this factor is not based on the sex differential, is related to the position in question, and is consistent with a business necessity.]
  2. Each factor relied upon is applied reasonably.
  3. The factors relied upon account for the entire wage differential.

Thus, the employer must affirmatively establish that its actions are not based on the affected employees' sex.

If an employer violates the FPA, the affected employee can seek monetary damages. Specifically, the employee may recover the amount of wages, plus interest, that the employee was deprived of because of the violation. The affected employee can also claim liquidated damages in an equal amount.

Any employee who feels they are subject to the violation of the FPA may file a complaint with the Division of Labor Standards Enforcement (DLSE), who will investigate the complaint. The employee may instead file a civil action for the balance of wages, plus interest, and liquidated damages in an equal amount as well. Further, by filing the civil action, the employee will be able to seek to recover costs of the suit and reasonable attorney's fees. Note, however, that an employee can only bring a civil action within two (2) years after the violation occurs; and only within three (3) years if there was a willful violation.

In addition, an employer cannot discriminate or retaliate against an employee who tries to enforce the FPA. This includes an employee who discloses his or her own wages, discusses the wages of others, or encourages another employee to exercise rights under the FPA. If such discrimination or retaliation occurs, the affected employee may pursue a civil action and seek reinstatement (to work for the employer) or reimbursement (for lost wages and work benefits). The affected employee can only bring such a civil action within one (1) year after the violation occurs.

Overall, the FPA encompasses the aggressive efforts to try and close the wage gap between males and females, a wage gap that has seemingly been caused solely because of sex. Requiring employers to make an affirmative showing – that their different wage rates are not due to its employees' sexes – will cause employers to make bigger strides towards closing the sex-based wage gap.

If you think you may have potential claims relating to your employment or believe you have claims appropriate for a class action, contact our office to have your claims evaluated.

 

The Shimoda Law Corp. legal articles should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents of these articles are intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have.

Back to Articles