Borrowing liberally from a bill that has languished on Capitol Hill (the Paycheck Fairness Act), California lawmakers have passed SB 358, which requires employers to allow employees to discuss their pay. It also makes it easier for employees to bring unequal pay claims against employers.
Until passage of this law, employees had to show that a worker of a different gender performing the same job received more pay. Now, employees can proceed with a claim if they identify a worker performing “substantially similar work,” allowing employees to choose from a wider group of workers to demonstrate bias.
“Substantially similar work” is defined as a job requiring composite of skill, effort and responsibility performed under similar working conditions. Litigious employees need no longer identify someone performing the exact same job for more money to proceed to court.
Once an employee identifies a different-gendered worker performing similar work at a higher pay rate, the employer must show a reason for the disparity.
The law allows employers to use a seniority system, a merit system, a system that measures earnings by quality or quantity of production, or a bona fide factor other than sex (such as education, training, or experience) as potential explanations for the higher pay.
Damages an employee can claim remain unchanged at the amount of back pay plus interest, plus an equal amount in liquidated damages.
Note: Employers should prepare for the new law by identifying comparable positions throughout the workplace. Any disparities discovered during this process should be addressed immediately.
This process also forces employers to identify similar work classes and define the distinctions between classes. This information will be needed should an employer be challenged.
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