While it may seem like an issue of the past, the gender pay gap is still a prevalent concern. Our recent white paper, the “Impact of New Gender Pay Equality Laws”, addresses the impact of this gap and the current laws in place to combat it.
In January 2016, Governor Jerry Brown passed the California Fair Pay Act, one of the toughest pay equity laws in the nation.
With this act came five major changes:
1. Employee comparison based on location.
Employees can be compared even if they do not work at the same establishment, meaning the pay of an employee in one location may be compared to the pay of other employees who work hundreds of miles apart.
2. Employee comparison based on responsibility.
Employees can be compared even if they do not hold the “same” or equal” job titles. The new law requires only a showing that the employees are engaged in “substantially” similar work, skill, effort, and responsibilities performed under similar conditions.
3. Pay transparency.
Employers may not prohibit employees from disclosing or discussing their own wages or the wages of others, or from aiding or encouraging other employees to exercise their rights under the law.
4. Records retention
The Fair Pay Act extends an employer’s obligation to maintain records of wages and pay rates, job classifications, and other terms of employment from two to three years.
5. Enforcement.The law creates an additional private right of action—this one with a one-year statute of limitations—for employees who allege they have been discharged, discriminated, or retaliated against for engaging in any conduct protected by the statute. These employees may seek reinstatement and reimbursement for lost wages and benefits, interest, and “appropriate equitable relief.”
While the benefits in correcting wage discrepancies for employee and employers alike are many, the law can create challenges for some employers. It’s important to note that one in twelve federal court cases are employment-related, with the average settlement being $173,000 in 2013. By following best practices, employers can take the necessary steps to reduce their risk of a gender-based discrimination lawsuit. It’s also a good idea to consider Employment Practices Liability Insurance coverage.
To learn how to reduce the chance of facing a gender-based discrimination lawsuit, download the “Impact of New Gender Pay Equality Laws”.