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New Changes to California's Equal Pay Law

equal-pay.jpgLast month brought two new important changes coming to the California Equal Pay Act. As with all employment law regulations, companies operating within the state must ensure that their firm is in full compliance with this law. This means understanding and conforming to the new aspects of the law. Further, it is critically important that your company has good relations with its workers and that you have well-drafted employment contracts that will protect you from liability. If you have any questions or concerns about how California's employment law changes will impact your company, please contact our experienced San Jose business law attorneys today to discuss your case.

Two Changes to the California Equal Pay Act

1. The Equal Pay Law Now Includes Race-Based Criteria

The original purpose of the state's equal pay legislation was to close a gap in wages between men and women. According to state lawmakers, a similar gap also exists on racial grounds. As such, lawmakers have taken steps to try to eliminate this gap. With the new law, employers must ensure that there are no non-justifiable discrepancies in the salaries of employees of different races who perform substantially similar work. If there is a discrepancy, employers must be able to provide a legitimate, non-race and non-gender-based reason as to why the salary difference exists. Some examples of legitimate reasons include:

  • Experience;
  • Educational attainment; and
  • Quantifiable production metrics.

2. Salary History Is No Longer a Valid Justification for Unequal Pay

Previously, a worker's previous salary history could also have been used by employers as a justification for salary differences. However, now salary history alone may no longer be used by employers to justify any discrepancies. The reason for this is simple: California state legislators believe that differing salary histories may simply be an artifact of previous gender or racial discrimination. Therefore, employers must be able to provide a valid justification for a discrepancy that does not rely on this potentially discriminatory metric.

While this change in law makes sense, it will likely create some serious challenges for some firms. Employers must be ready for this change and they need to be sure that their business is in compliance with the new regulations. Failure to comply with state or federal labor laws could put your company at a serious liability risk. The last thing you want to deal with is a lawsuit from one of your own workers.

Contact Our Office Today

The skilled San Jose employment law attorneys at Diemer, Whitman & Cardosi, LLP have extensive experience protecting the rights of employers in California. We represent companies throughout the Bay Area, including in San Francisco and Oakland. If you have questions about labor law compliance or employment litigation in general, please contact our office today to set up a free review of your case.



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