Currently, California Labor Code § 1197.5 requires that men and women working at the same location receive equal pay for equal work. But according to an all-but-enacted amendment to that statute, men and women must receive equal pay for substantially similar work, regardless of whether they work at the same location.
Controversial stuff? Apparently not. SB 358 passed both houses of the state legislature unanimously and the governor broke with his tradition of not commenting on pending legislation to announce that he’ll sign it. The bill even had support from the California Chamber of Commerce.
Here are 5 steps employers can take now to minimize their exposure to claims of pay discrimination.
- Make sure your equal employment opportunity policy and compensation guidelines specifically prohibits pay discrimination.
- Understand what factors can legitimately be used to justify pay disparities. These include education, training, and experience. Systems that base compensation on seniority, merit, and production are also acceptable.
- Evaluate your compensation system to make sure that any pay disparities can be explained using legitimate factors. Even where those factors are present, employers need to be prepared to show that they were applied reasonably and that they account for the entire differential in wages. If you have attorneys oversee the process, you can often protect the analysis under the attorney-client privilege.
- Provide guidelines and training to those making compensation decisions so that they understand their legal obligations and what factors are permissible.
- Don’t prohibit employees from discussing their compensation. That was illegal in California before, but the new law reinforces that prohibition.
According to SB 358, women in California earn 84 cents for each dollar earned by a man. So if women in your workplace earn say 86 cents, should you expect special recognition? Not unless your definition of “special recognition” includes getting sued.