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California’s Fair Pay Act

Recent data shows that on average in the United States full-time working women earn just 78 cents for every dollar a man earns. To correct this disparity, many states across the country have enacted equal-pay laws.

Governor Brown recently signed a new bill into law, known as California's Fair Pay Act (SB 358). Under the prior existing law, employers were prohibited from paying an employee less than other employees of the opposite sex in the same establishment for equal work which required equal skill, effort, and responsibility, and which were performed under similar working conditions.

The new law gets rid of the limitation on the pay differential being "within the same establishment." The bill also places a burden on employers to prove that any difference in employee wages is justified based on valid considerations. Examples of some valid considerations include: (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production; and/or (4) a bona fide factor other than sex, such as education, training, or experience - this last factor only applies if the employer shows that the factor is not on a sex-based difference and is consistent with a business necessity.

Failure to comply with this new law can result in some severe consequences for employers. If an employee believes that their rights have been violated under this law, they may file a complaint with the Division of Labor Standards Enforcement (DLSE) and/or in civil court to recover any wages owed, plus interest, their attorney's fees and court costs.

According to a recent article in the Los Angeles Times, SB 358 is "one of the toughest pay equity laws in the nation." California is leading the charge for pay equality in this country - make sure your business is in compliance.

This article is for education and information purposes only; it should not be construed as legal advice. If you have an employment law question for inclusion in a future article, contact Brett T. Abbott at Gubler & Abbott LLP (bta@thecalifornialawyers.com). For specific employment law advice or other legal assistance, contact Gubler & Abbott LLP, (559) 625-9600, 1110 N. Chinowith St., Visalia, CA 93291 (www.thecalifornialawyers.com).

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