As people get ready to ring in 2016, the lawyers who represent employees in California have extra incentive to celebrate. That’s because California’s Fair Pay Act – the most demanding equal pay law in the country – takes effect January 1st.
We’ve written about this new law repeatedly.
- After the bill passed the legislature in September, there was this post about what to expect.
- Then this post in October exploring the law in more detail, this one later that month asking whether the Fair Pay Act would open the proverbial floodgates of litigation, and to round out the month, this post asking how employers would measure skill, effort, responsibility, and working conditions (since those are the factors that can permissibly justify pay disparities).
- November brought this post discussing (again) steps to prepare for the new law.
- Not wanting to miss out on the fun, our own Keith Chrestionson is quoted extensively in an article from San Francisco Business Times titled: “The Top 5 Things Businesses Need to Know About the Equal Pay Law.”
Why do we write about this so often? Is it because we struggle to come up with new topics to blog about? No way! It’s because the Fair Pay Act has the potential to be a game changer.
First, there are the vague new standards it imposes (e.g. equal pay for “substantially similar” work). Second, you have the difficulty of quantifying factors such as skill, effort, responsibility, and working conditions. Third, the Fair Pay Act puts burdens on the employer that are unprecedented (to prove that a wage differential is based on one or more legitimate factors, that the factors relied on are applied reasonably, and that those factors account for the entire disparity). Finally, a liquidated damages provision doubles any actual economic damages.
As with so many California employment laws, it pays to be proactive. In this case, that involves analyzing your payroll data for discrepancies and determining whether they can be justified. By involving counsel, employers can protect that analysis under the attorney-client privilege. But whatever you do, the clock is ticking.