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California Fair Pay Act

September 27, 2022

You might think a workplace is a neutral place where gender, race, religion, age, and other personal differences are irrelevant. However, if you look closer, it’s evident that these factors often impact how people are treated and compensated.

The Fair Pay Act, also known as AB 1284 or the California Fair Wage Act, bans companies from inquiring about your salary history and giving you a salary that is lower than the average of the other employees. It also protects the employee's right to disclose and discuss their wages with others within their company.

The Act covers several employment situations and prohibits gender, race, religion, age, and race discrimination when setting pay rates. It also requires employers to justify any pay disparity based on other personal factors such as education or experience.

In addition, state-wide wage transparency may be made mandatory, and employers should keep a written description of how they determined your salary. Keep reading to learn more.

What is the California Equal Pay Act?

The California Equal Pay Act is a law that protects employees from gender and race discrimination in pay scale. It also requires employers to provide a valid reason for any pay disparity related to other personal characteristics, such as experience or education. This law applies to all employees who work in California, regardless of gender, race, religion, or age.

California Equal Pay Act’s ‘Substantially Similar’ Standard Follows Federal Law

California's Fair Pay Act requires that employees be paid equally for "substantially similar work.” This standard follows the same guidelines as the federal law, which requires that the jobs being compared must be “virtually identical” concerning the skill, effort, and responsibility.

Again, these are just general guidelines, and courts will evaluate each case individually, considering all the relevant circumstances.

What About the California Fair Pay Act?

Skill

Payment is directly related to skill if the job requires a higher skill level than other comparable jobs. Higher skill levels might be due to the complexity of the job or the degree of knowledge required to do it.

Skill is the level of knowledge and ability needed to do the job. Skill can be measured by examining how long it takes to learn the job and how much training is needed. Skill is not based on the level of education required to do the job.

Effort

Payment is based on the amount of effort needed to do the job and if it requires a high level of exertion. Effort is the amount of physical or mental energy needed to do the job. It may also refer to the amount of time spent on the job. Effort is not based on the amount of skill needed to do a job.

Responsibility

Payment is based on the level of responsibility and if the job carries a higher degree of risk or responsibility than other comparable jobs. Responsibility is the degree of accountability for the quality or quantity of a product or service.

It also refers to the degree of authority and trust given to an individual for planning, directing, and controlling the work of others. Responsibility is not based on the amount of skill needed to do a job.

What Employers Should Know About California Fair Pay Act

The California Fair Pay Act’s ‘equal pay for equal work’ standard means employers cannot justify paying employees less based on their gender, race, or ethnicity. This law will apply to all California employees, including full-time and part-time workers, interns, contractors, and volunteers. It also applies to employees who are working from remote locations.

In addition, the law applies to all companies with at least five employees, which means that it’s important to stay on top of your employee payroll. It’s also important to note that California Fair Pay Act applies to all workplaces within California.

When Could You Have a Claim Against an Employer Under the California Equal Pay Act?

Employees can file a claim against their employers under the California Fair Pay Act.

If you have a claim against your employer, you should file it as soon as possible. It can be challenging to prove that you’re being paid less than your co-workers for reasons other than your skill, effort, or responsibility.

The California employment law states that an employer must pay equal wages to all employees.

The California Fair Pay Act is a law that protects employees from unequal pay. The law requires employers to pay equal wages to all employees, regardless of sex, race, religion, national origin, or age.

How Would You Know if You’re Not Being Paid Fairly?

The best way to determine if you’re being paid fairly is to keep track of your hours worked, the amount of product you produce, and the amount of money you earn. By reviewing your data regularly, you can see if you’re being compensated fairly compared to your co-workers. If you find that you’re being underpaid, you can bring it up with your employer and ask them to review your pay rate.

If you’re uncomfortable bringing it up with your employer, you can talk to a government agency, such as California’s California Civil Rights department (CCRD). The DFEH can conduct an investigation, and if they find that you’re being paid unfairly, they can bring it to your employer’s attention.  You can also make a complaint to the California Labor Commissioner.

People also ask

What is considered unfair pay?

There are many laws and regulations regarding fair pay in California.

You can learn more about what is considered unfair pay by reviewing the following topics: The California Labor Code Sections 202, 208, and 209; The California Code of Regulations Sections 17500, 17501, and 17502; The California Wage Order Sections 9-201, 9-202, 9-203, 9-204, and 9-205; The California Equal Pay Act; The California Department of Fair Employment and Housing Section 202 of the California Labor Code sets forth the definition of wages.

Wage rates include, but are not limited to, all forms of compensation. All forms of compensation are defined as “payment for labor performed.”

What is a fair pay policy?

A fair pay policy is a written policy that explains how the employee's wages will be determined and how they will be communicated to you. An employer must adhere to their written policy concerning salary. Additionally, the policy must be made available to all employees.

The policy must be disclosed in writing and posted where employees are most likely to see it. The policy must be easily accessible for employees to see and understand. This should be within the guidelines of the California Labor Code Sections 203 and 208.

Can a company lower your pay rate in California?

State law does not guide whether or not a company or a prospective employer can lower your salary in exchange for equity. The California Labor Code Section 209 does state that employers cannot offer lower wages in exchange for equity.

Employers can change your rate of pay at any time - either up or down - as long as it is not for an illegal reason. It is up to the employee to decide whether or not they want to continue to work for the new wage amount. 

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