Designed to close the gap in pay between what California men and women are paid in similar jobs, the amended California Fair Pay Act (CFPA) went into effect on January 1, 2016. Unlike some employment laws, the Fair Pay Act applies to employers of any size.
The CFPA, effective January 1, 2016, provided in part that:
- Women and men must be paid equally for “substantially similar” work,
- Employer must account for the entire wage differential,
- No retaliation for asking about pay.
But, what is “substantially similar” work? It is work that is mostly similar in skill, effort, responsibility, and performed under similar working conditions. Skill includes an individual’s experience, ability, education, and training required to perform the job. Effort includes the amount of physical or mental exertion needed and responsibility entails the degree of accountability or duties required.
Let’s consider a recent complain filed against Google Inc., to help us understand the significance of the CFPA. Ellis-v-Google-Complaint.pdf. On September 14, 2017, the tech company was sued by three women for systematically paying women less than men in similar jobs and enabling unequal promotions and opportunities for male and female workers. The complaint provided that, “Google has discriminated and continues to discriminate against Plaintiffs…by paying its female employees at wage rates less than the wage rates paid to its male employees for substantially equal or similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions…” We are following the proceedings of this case carefully and emphasize the importance of the CFPA to employees in California.
2017 CFPA Amendments for Equal Pay Based on Race and Ethnicity
The CFPA was amended yet again on January 1, 2017 to include compensation differences between members of one race or ethnicity and those of another. In other words, employees of one gender, race, or ethnicity cannot be paid more for substantially similar work than those of another gender, race or ethnicity unless such a gap is fully justified by factors unrelated to membership in the protected class.
The second amendment to the CFPA includes that prior salary shall not, by itself, justify any disparity in compensation. This prohibits an employer from justifying an otherwise unlawful difference in pay on an employee’s or applicant’s prior salary alone. And to be clear, the law does not ban questions about prior salary; however, such questions cannot be the sole reason an employer pays one employee less than another for substantially similar work.