California Fair Pay Act Expansion – AB 46

Author: Trina Clayton

As an important reminder, in 2016, California enacted the Fair Pay Act, which revised and expanded previous state law relating to gender pay inequality – the Fair Pay Act was expanded in 2017 to address racial/ethnic wage disparity.

The current law prohibits a private employer from paying any of its employees wage rates that are less than the rates paid to employees of another gender, race or ethnicity, for substantially similar work.  If such a wage differential exists, an employer must be able to show that specific and reasonably applied factors account for the entire differential. These factors include:

  • 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.

In addition, the Fair Pay Act states that prior salary cannot, by itself, justify a disparity in compensation.  Unlike FEHA, the California Fair Pay Act does not require an employee show that the employer had any discriminatory intent.

Beginning January 1st, 2018, AB 46 will expand the Fair Pay Act to also cover public employers.  Public employers will not, however, be subject to the Labor Code provision applicable to private employers that makes willful violation of the Fair Pay Act a misdemeanor.   For specific legal advice regarding the California Fair Pay Act or any other employment issue, please contact Ad Astra for guidance.

By Scripta Ad Astra Staff

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