With the recent passage of the California Fair Pay Act, California strengthened its existing equal pay law by requiring employers pay men and women the same for not only “equal work,” but also for “substantially similar work.” As a result, employees may now challenge the fairness of their pay by drawing comparisons to “substantially similar” jobs with different titles. The law further prohibits employers from retaliating against employees seeking to raise their pay under the law and also provides that employers may not prohibit employees from disclosing their own wages or discussing the wages of others. Significantly, the new law continues to provide exemptions for pay systems based on seniority, merit, quantitative and qualitative production, or a “bona fide factor other than sex, such as education, training or experience.”

Equal Rights Advocates Executive Director Noreen Farrell described the law as “the strongest equal-pay law in the country.” However, Richard A. Epstein, senior fellow at the Hoover Institution at Stanford University, predicted that the bill will intensify the state’s economic woes by creating an “administrative quagmire” that will discourage voluntary job changes and encourage companies to leave or reduce their state footprint.

Regardless, supporters of the law point out statistics that show differences in pay and contend that the new law is aimed at closing the existing wage gap between men and women.

Time will dictate if the California Fair Pay Act succeeds in accomplishing its goals, and also, whether it will inspire other states to model similar legislation. Whether or not similar legislation is passed anytime soon in other states, the California Fair Pay Act puts employers on notice to consider not only equal pay for equal work, but also equal pay for substantially similar work.

For more information on how this could impact your business, contact:

• Michael Rubin (716.844.3477; mrubin@goldbergsegalla.com)
• Caroline J. Berdzik (609.986.1314; cberdzik@goldbergsegalla.com)
• Or another member of the Goldberg Segalla Employment and Labor Practice Group.