New
Fair Pay requirements went in to effect in 2017 and state that an employer must
pay the same for “substantially similar” work, when viewed as composite of
skill, effort and responsibility.
The new regulations eliminated the prior
standard of comparing work at the “same establishment.” Now employees can compare their pay to
employees who do not perform same work or who are not employed in same position
or location.
What
is substantially similar work? According to the California Senate example:
- Female
secretary’s primary duties – answer telephone, make copies, transmit correspondence
- Male
assistant’s primary duties – answer telephone, transmit documents, perform
light filing tasks
- “Plaintiff’s
burden would be to show that the man and woman should be paid the same wages
because, when viewed as a composite of skill, effort, and responsibility, they
were performing substantially similar jobs.”
The
key is to look beyond job titles, the similarities can be subtle, some other
examples:
- Hotel
housekeepers (mostly female) v. hotel custodians/janitors (mostly male)
- Female
cafe workers preparing meals on behalf factory’s shop floor workers vs. male
cooks who make lunches for senior managers
- Call
center customer service reps vs. call center sales vs. call center support
What
are the exceptions for when pay can be different?
- Seniority
system
- Merit
system
- System
that measures earnings by quantity or quality of production
- Other
bona fide (nondiscriminatory) factor consistent with business necessity as
defined as an overriding legitimate business purpose such that the factor
relied upon effectively fulfills the business purpose it is supposed to serve
- Local
job markets can be a factor for differences
Who
has the burden of Proof?
Employee’s
must show different pay under new “substantially similar” work standard. The
employer must demonstrate that the differences are legitimate and
nondiscriminatory.
Beginning
in 2018:
- Employers
may not rely on the salary history of an applicant to make an offer or
determine salary.
- Employers
may not seek salary history of applicant.
- Employers
must, upon reasonable request, provide the pay scale for a position to an
applicant.
- Applicants
may voluntarily and without prompting disclose salary history information.
- Employers
are not prohibited from considering voluntarily disclosed salary history
information in determining salary.
Best
practices for employers to protect themselves:
- Update
hiring processes
- Update
employment applications
- Train
interviewers to not ask for prior salary information
- Have
pay scales available upon request
- Have
a form available for applicants to sign to document a voluntary and unsolicited
disclosure of salary information.
All
employers should analyze the content of their jobs to identify substantially
similar work and to identify disparities in compensation.
It is recommended
that any analysis done be conducted with employment counsel so that the
attorney-client privilege is maintained. A self-audit conducted without counsel
will be subject to discovery in any litigation, and failure to correct problems
will be dangerous.
Lauren Sims is the article author
and the Director of Human Resources Consulting for eqHR Solutions.
Whenever you require professional Human Resources or Payroll guidance to navigate
the ever-changing landscape of California and Federal Employment Laws &
Regulations, contact us for a no obligation consultation. eqHR Solutions offers professional, tactical and strategic, human resources
support, ADP payroll product implementation/training and payroll processing
services for businesses throughout Southern California.
