Susan B. Anthony once said, “The day may be approaching when the whole world will recognize women as the equal of a man.” Since Ms. Anthony’s time, women have come far in the quest for equality. A few things stand in their way and the key one is equal pay.
For decades, the government gave speeches and signed bills to enforce equal pay in the American workplace. The Equal Pay Act of 1963 attempted to make progress, but its efforts have fallen short of the goal. Now, California leads the charge with the California Equal Pay Act (CEPA).
But what is the California Equal Pay Act? How must employers comply? What can employees expect from the Act? In the end, is this law even a good idea?
The Basics of the California Equal Pay Act
In 2015, Governor Jerry Brown signed the CEPA and it took effect on January 1st, 2016. The Act is designed to do the following:
- Equal pay for jobs that have “substantially similar work” but different titles.
- Prohibits retaliation against employees who discuss wages with co-workers.
- Employees may now bring a civil actions if they face retaliation or discrimination.
- Employers need to show that wage differences are due to other factors, like merit, seniority, etc. and not due to discrimination.
- Employers must retain records/information of employees for three years instead of two.
Ultimately, the Act offers employees much greater protection. The former rule for equal pay was for “equal work.” However, with the standard lowered to "substantially similar work," it isn't as difficult to prove that some discrimination has occurred. The CEPA also gives employees a legal right to sue their employer if they faced retaliation or discrimination due to a protected right.
The Changes Employers Face
The main change for employers is simple: employees have more grounds for litigation. Employees may challenge employers to prove the employer does not have a wage gap if the employee has a counterpart who performs “substantially similar work.”
If there is a wage gap, employers must prove a valid reason for the wage gap exists. Valid reasons include: seniority, merit, a different measurement of earnings, etc. Employers need to come up with a bona fide reason as to why the employee has a wage difference, or the employer will risk losing the case.
Employers need to review any wage differences. They must identify the pay scale of positions that perform “substantially similar work” and be prepared to pay compensation, modify policies, and make changes to wage practices.
What Can Employees Expect From the CA Equal Pay Act?
Employees should learn their rights and be aware of the new limitations their employers face. Employers bear the burden of proof to show the employee was discriminated for a bona fide reason. Employees can freely engage in a discussion about wages with fellow employees. Employers or employees are not obligated to discuss wages, but now employees can discuss wages without fear of retaliation.
Employees also have more remedies if they asserts their right under the CEPA. They could receive back pay, reinstatement, lost benefits, and other necessary relief (equitable relief). Employees now have more rights and protections to bring a cause of action against an unfair employer.
This Is A Great Idea And It Can Backfire, But It Probably Won’t
Wage equality continues to be a persistent and sobering reality. Since the time of the Industrial Revolution, women like Susan B. Anthony have struggled to end the pay gap. As Americans, we should strive to end wage differences that exist because of an employee’s appearance, race, or gender.
However, the reality is that employees who work more for less are what widen a corporation’s profit margin. Companies will view the strict CA Equal Pay Act as a blow to their profits and may shift their structure to avoid losing money. Companies can move their place of production elsewhere. They may also change how employees are paid.
But California shouldn’t be afraid of corporations leaving or changing their wage policy. In the end, companies that are vocal and support the CA Equal Pay Act will gain conscious consumers.
Authored by Janice Lim, LegalMatch Legal Writer