In the 1980s there was an to attempt to require employers to compensate male and female employees equally for comparable work. It was commonly referred to as “comparable worth.” It required that jobs of various types be compared to other “similar” jobs and that employees in both jobs be compensated at the same rate. The idea was that some jobs were normally occupied by women and others by men so the types of duties and responsibilities of different positions should be compared to determine if these jobs were comparable to others and should be paid at the same rates. The problem was determining what constituted “similar” work. Is a nurse the same as an engineer? Or a mechanic? You can see the problems that arose and it was eventually abandoned.
The Amended Law
This year, the California Legislature has taken a step back towards comparable worth in their amendment of Labor Code section 1197.5. This is not a new law. Labor Code section 1197.5, passed in 1949, has always required that employees be compensated equally. It previously prohibited an employer from paying an employee less than the compensation paid to an employee of the opposite sex in the same establishment for equal work in jobs that required equal skill, effort and responsibility. The changes in the law effective January 1, 2016, remove the location element and place the burden on the employer to show that the differences in pay are not based upon gender.
Specifically, the California Legislature has amended the statute eliminating the terms “within the same establishment,” “equal work” and “equal skill, effort and responsibility.” Now California law prohibits an employer from paying any of its employees of the opposite sex different compensation for “substantially similar work, when viewed as a composite of skill, effort and responsibility.” It appears that location can no longer be a consideration. Should a position in San Francisco be paid the same as a “similar” position in Los Angeles? What about Fresno? What is a similar position? What happened to compensation to recruit and retain? As you can see, employers are now required to make very difficult judgment calls on which positions are similar.
The changes place the burden on the employer to affirmatively show that any difference in compensation is not unlawful. The employer cannot pay employees of the opposite sex different rates for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” These terms are not defined. However, the employer can pay different rates if such rates are based on (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production; or (4) a bona fide factor other than sex such as education, training or experience.
The law also now prohibits retaliation against an employee who discloses their own wages, discusses the wages of others, inquires about another employee’s wages, or aids and encourages another employee to exercise his or her rights under this statute. California already has a law that prohibits employers from preventing employees from discussing their compensation (sometimes referred to as the 9 to 5 law because it was authored by Tom Hayden, then married to Jane Fonda who starred in the movie “9 to 5”) and, therefore, employees are able to discuss their compensation if they choose to do so.
If an employer violates this law, the employee is entitled to the difference in the wage rates and an equal amount as liquidated damages.
The amended law is likely to generate additional litigation and new case law in California as the courts determine whether positions are comparable and evaluate employer defenses to differences in pay rates.
Affirmative Steps to Take to Determine if the Wages Paid by your Company or Organization are in Compliance
So, what precautions may an employer take? There are several proactive steps that you can take:
- Conduct an audit of your compensation for the same positions and do that on a state-wide basis.
- Compare positions that are close to the same compensation level. Determine if certain jobs are paid less and whether there is a gender tie to the pay differential. Remember that paying a man (or woman) more because they are the “head” of the family or the sole or major breadwinner will be in violation of the law.
- Evaluate all positions to determine which ones are require similar skill, effort and responsibility. Do these jobs tend to be held by women or men? Are they paid at different rates?
- Make sure any compensation adjustments are adequately documented so you can justify raises that are unequal.
- Make sure that anyone involved in hiring, or those who determine starting salaries and/or increases in wages are aware of the new law and that decisions are carefully documented.
Although immediate litigation in this area is not likely, it is prudent to try to bring your company or organization into compliance now rather than when you are gathering documents and preparing for litigation.
Thank you for joining us on ClarkTalk! We look forward to seeing you again on this forum. Please note that the views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog. You should certainly consult legal counsel of your choice when considering conducting a review of your pay practices. If you wish to consult with the author of this post or another attorney at Clark & Trevithick, please contact Debbie Petito firstname.lastname@example.org or Leonard Brazil email@example.com by email at or telephonically by calling the author at (213) 629-5700.