California’s Equal Pay Act Includes Race and Ethnicity.

As it is currently drafted, the substantive portion of the Equal Pay Act states “[a]n employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”  Limited exceptions apply where an employer has engaged a compensation system that does not rely on sex-based characteristics, including 1) a seniority system, 2) a merit system, 3) a system that measures earnings by quantity or quality of production, or 4) a bona fide factor other than sex, such as education, training, or experience. For decades, California’s Equal Pay Act attempted to narrow the wage gap between male and female employees.  More recently, California strengthened the Equal Pay Act in a number of ways.

A significant expansion to the Equal Pay Act derives from Senate Bill (SB) 1063.  This Bill, which was recently approved by Governor Jerry Brown, includes equal pay protections for individuals with different racial or ethnic characteristics.

California strengthened the protections in the Act due to a persisting wage gap between men and women and between races and ethnicities.  In Assembly Bill (AB) No. 1676, the Legislature declared:

“Over the past decade, the wage gap has barely budged and wage disparities continue to persist. In 2015, the gender wage gap in California stood at 16 cents on the dollar. For women of color, wage inequality is much worse. African American women in California make just 63 cents and Hispanic women less than 43 cents for every dollar white non-Hispanic men make.” See Section 1.

Some have argued that newer provisions of the Equal Pay Act broaden the traditional discrimination laws because it allows employees to compare their pay rate to other employees who perform “substantially similar work”.   As such, employees who have been traditionally been provided a certain job title, such as a housekeeper, may be able to compare their rate of pay to “substantial similar” positions, such as a janitor.  With the new laws, employers should analyze the job functions of each employee to ensure that the employer is justified in paying employees with certain protected characteristics an amount which is based on “a composite of skill, effort, and responsibility, and performed under similar working conditions.”

Although the Equal Pay Act protections are limited to just three (3) protected characteristics (sex, race and ethnicity), maybe we will see further protected characteristics written within the Equal Pay Act in the future.  In the meantime, employers may want to seek the advice of an attorney to determine whether to apply the elements of the Equal Pay Act to other protected characteristics.