Guide to California’s Equal Pay Laws

CEA Presents:  Guide to California’s Equal Pay Laws

Concerns about the pay gap between men and women is an important issue for American women. In fact, in a recent survey, respondents were asked, “what’s the most important issue facing women in the workplace?” 42% selected “pay gap” over gender discrimination (26%), glass ceiling (25%) and sexual harassment (7%).

For decades now, the California Equal Pay Act has prohibited an employer from paying its employees less than employees of the opposite sex for equal work. In 2016, the California Fair Pay Act was enacted to strengthen the Equal Pay Act.

While California’s equal pay laws have been clarified and expanded over the past couple of years, the overall goal remains: Ensure that women are paid equally for work that is substantially similar to the work of their male colleagues.

To help employers understand their equal pay obligations – whether when recruiting or considering salary changes – the California Employers Association has prepared a Guide to California’s Equal Pay Act: What You Need to Know.

Raising Awareness

“Equal Pay Day” is a symbolic day dedicated to raising awareness about the pay gap. This year, Equal Pay Day fell on April 2, 2019. The date symbolizes how far into the year a woman has to work to earn the same amount of money that a man earned in the previous year.

For minorities, that date can come even later in the year. Black Women’s Equal Pay Day falls on August 22 – Black women earn about 61 cents on the dollar.  Latinas’ Equal Pay Day falls on November 20 – they face the largest wage gap, about 53 cents on the dollar.

The Female Quotient, a female-owned business committed to advancing equality in the workplace, brings home the hard truth on Equal Pay Day in their lounge by:

• Selling candy for $1 to men and 80 cents to women
• Featuring world clocks that show what time women should be able to leave work based on the pay gap in their country. For instance, in the U.S., women could clock out at 3:20 due to a 20% pay gap while men are compensated until 5 p.m.

Fair Pay Act Rules

California’s Fair Pay Act provides more protections than federal law. The burden is on employers to justify pay differentials from an acceptable list of factors that must be applied reasonably. The relied upon factors must account for the entire wage differential.

It’s unlawful for California employers to:

• ​ Discriminate between employees on the basis of sex, race, or ethnicity in the payment of wages or other compensation for substantially similar work.
• Pay wages or other compensation to any employee at a rate greater than the rate at which the employer pays employees of the opposite sex, or of another race, or of another ethnicity for substantially similar work, when viewed as a composite of skill, effort, and responsibility
• Screen job applicants or determine compensation for a position based on current or past compensation of a prospective employee.
• Withhold pay scale information when requested by an applicant.
• Retaliate against an employee who brings a complaint or files a claim under the Equal Pay Act.

CEA’s New Guide Can Help You Comply

CEA’s Guide to California’s Equal Pay Act:  What You Need to Know provides helpful information and tools:

• Background information on the law and potential penalties
• A thorough list of how best to prepare to do a compensation analysis for your company
• Frequently asked questions about equal pay and their answers
• Pay equity scenarios
• Important definitions
• A “Pay Equity Checklist”
• Criteria for determining “substantially similar work”

Let CEA help you with developing a pay program and meeting compensation and recruiting needs.  CEA’s professional compensation services team provides the right answers at a reasonable fee!