CA Fair Pay Act: Are You Achieving Pay Equity?
The Federal Equal Pay Act has been around for decades, with a central focus of prohibiting employers from paying employees performing the same work differently on the basis of sex. In 2015 the California Fair Pay Act came into being, and it has been getting more attention as lawsuits make headlines and California makes a concerted effort to achieve pay equity.
What Are the California Fair Pay Act Requirements?
While the Federal Equal Pay Act looks at ‘same work’, the California Fair Pay Act looks at ‘same or substantially similar work’ in making the case against employers who may discriminate. California employers need to look at each of their positions to evaluate if differences in pay for same or similar jobs are due to at least one of the following factors, which are allowed under the Act:
Seniority systems
Merit systems
Systems that measure quality or quantity of production; or
A “bona fide factor” other than sex, race, or ethnicity such as education, training, or experience.
Why should I be worried?
The potential for costly lawsuits should be a worry of every California-based company. April of this year the Disney Company was served with a claim under the Act. Two female employees claim they were paid less than male counterparts performing same or substantially similar work. The outcome of the Disney case has yet to be determined, but prudent employers are auditing their pay levels to ensure pay differences do not appear to be based upon gender, race, or ethnicity.
The Disney claim is one of the first claims under the California Fair Pay Act against a large corporation.
How do I protect my company?
Having an audit conducted by a qualified professional who has the background and experience to determine which jobs are same or similar is crucial. For companies with more than a few hundred employees, it may also be prudent to have a team of statistics experts do an analysis so that each variable related to pay can be reviewed separately from others.
Need Help with California Fair Pay Act Compliance? Conover Consulting has performed CA Fair Pay Act Audits for clients to ensure compliance, and partners with expert Economists and Statisticians at rule26.com on larger projects. With our team performing your Fair Pay Act audit, along with the oversight of qualified employment counsel, your company can work toward achieving pay equity in compliance with the law. Contact me for assistance with a Fair Pay Act audit.