California’s Fair Pay Act: Breaking News and Breaking the Glass Ceiling

October 6, 2015
By

Category: Compliance

It’s fitting that today California Governor Jerry Brown signed the Fair Pay Act at Rosie the Riveter National Park. “We Can Do It” was Rosie’s slogan, used to empower women in the workforce during WWII. Thanks to this new legislation, which goes into effect on January 1, California women workers are one step closer to being equals in the workplace.

The Fair Pay Act goes further than any current federal law to ensure that California women receive the pay they deserve. The federal Equal Pay Act of 1963, among other things, prohibits employers from using sex as a basis for paying wages. Despite this act, women remain underpaid in comparison to their male counterparts.

According to California’s Fair Pay Act, in 2013 a woman working full-time year-round earned an average of 84 cents to every dollar a man earned. This discrepancy in pay is even larger in certain industries: men working in Silicon Valley with a Bachelor’s Degree make 40% more than women with the same education level.

Such disparities are being attacked by fair pay legislation like the one passed today. We’ve outlined the key features of California’s new bill, including how it might affect your business:

1. The law replaces the term “equal work,” and “equal skill, effort, and responsibility” with “comparable work” and “comparable skill, effort, and responsibility.” Employees, now, must be paid equal pay for comparable work. 

  • For example: A female employee is responsible for answering phones and scheduling meetings, while a male employee is responsible for greeting clients and scheduling deliveries. Though their responsibilities aren’t technically identical, the tasks are comparable.

2. The new law ensures equal pay across a company’s offices.

  • For example: A female employee working at a company’s LA office should be paid the same amount as her male counterpart at the San Diego office.

3. The bill also requires employers to “affirmatively demonstrate” that wage differences are based on one or more specific factors, including systems of seniority, merit, quantity or quality of production, or that the work is performed on different shifts, or on different times of day.

  • For example: Employees from the day shift can be paid differently from their night-shift counterparts, and employees with 10 years’ experience can be paid differently than new hires because these differentials are based on established systems.

4. Employers also can’t retaliate against employees who want to discuss their salaries. It can be the case that women don’t know they’re making less if they are prohibited or discouraged from inquiring.

5. Finally, the bill requires employers to post these provisions in a conspicuous location frequented by employees during the hours of the workday.

Creating, maintaining, and documenting performance is going to be crucial to ensuring you offer equal pay for comparable work. If you’re looking for performance review guidance, check out these HR answers: on when and how to conduct reviews, tips for conducting a review if you don’t have the funds for a raise, and how to implement 360-reviews. Our platform can also help you maintain and analyze your records so you can stay compliant with the Fair Pay Act and any other new regulations.

The Fair Pay Act is a great step in the right direction–all employees want to feel valued and treated fairly. Thanks to Rosie and others like her, we all knew we could do it, now we can do it for fair pay.

About

After working in the field of psychology research for years, Bella loves sharing what she's learned in a more directly impactful context. She's interested in the intersection of people and business, and wants to promote conversations about HR. She's an amateur ceramicist, pro dog walker, and produces podcasts on the side.

Category: Benefits, Featured


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