LABOR COMMISSIONER ISSUES FREQUENTLY-ASKED QUESTIONS ON WORKPLACE GENDER PARITY

California’s long-established Equal Pay Act (the Act) requires California employers to pay their employees of the opposite sex the same for equal work.

As previously covered in Fair Pay Act Aims to Level the Playing Field, the Act’s amendments effective January 1, 2016 make it harder to justify unequal pay between male and female co-workers.  For example, the amended Act eliminates the requirement that the comparative jobs in question must be located at the same establishment and it replaces a comparison of “equal” work with a comparison of “substantially similar” work.

To help understand the amendments, on April 6, 2016, California’s Labor Commissioner’s Office prepared answers to frequently asked questions about the Act (FAQs).

The newly issued FAQs define the term “substantially similar work” as mostly similar in skill, effort and responsibility and performed under similar working conditions.  “Skill” refers to required experience, ability, education, and training.  “Effort” refers to the necessary amount of physical or mental exertion.  “Responsibility” refers to the degree of accountability or duties required in performing the job.  “Working conditions” mean the physical surroundings (temperature, fumes, ventilation) and hazards. A “bona fide factor other than sex” must be job related, consistent with business necessity, and not based on or derived from a sex-based factor.  Examples include education, training or experience.

These FAQs also describe what an employer must do to defeat an Equal Pay Act claim; i.e., prove that a pay differential for “substantially similar work” was due to seniority, merit, a system that measures production, and/or a “bona fide factor other than sex.”  Additionally, the employer must show that it applied the above factor(s) reasonably and that such factor(s) account for the entire difference in wages.

The FAQs also explain how, when and where an employee may file a claim to enforce the Act.

In addition to carefully studying the FAQs, employers should ensure they base all compensation decisions — including salary, bonuses and commissions — solely on objective criteria that comport with the amended Act. Employers should also consider reviewing their employees’ current or prospective pay structures with the help of a competent employment attorney.

For more information, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.