California Fair Pay Act: Things You Need to Know

As California employers are well aware, the California Fair Pay Act went into effect on January 1, 2016. In 2015, the U.S. Census Bureau reported that women only earn 84 cents to each dollar earned by their male counterparts. The law is intended to eliminate that gender wage gap in California.

​Key Components of Law Including Available Defenses:

  • Employers must pay men and women an equal amount for “substantially similar work” “under similar working conditions.”  What constitutes similar working conditions is yet to be determined. 
  • Employers may defend pay differentials with at least five different defenses, each of which must be “applied reasonably”:
    • Seniority
    • Merit
    • Quantity or quality of production
    • Other bona fide factors, such as greater education, training or experience
    • Business necessity
  • Employers may also want to explore defending any pay differentials by asserting that market conditions and cost of living differences render the working conditions dissimilar. 
  • The law also requires employers to keep records of wages and job classifications for three years (up from two under prior law).
  • Employers may not prevent employees from inquiring about the salaries of others nor may they retaliate against employees who inquire about wage differentials.

Recommendations for Compliance:

  • Conduct a wage audit and identify any potential gender gaps.
  • Revise job descriptions for completeness and specificity to avoid substantially similar descriptions of different positions.
  • Consider applying a numeric system for bona fide factors such as education or experience so that there is an easily defensible scale that is applied.

For more information regarding claims related to gender wage disparities, contact Ford & Diulio PC’s experienced Orange County civil attorneys at 714-384-5540 or email Jessica Diulio