How The California Fair Pay Act Works

Clarification From a San Francisco Employment Lawyer

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Employers in California are now under one of the strictest and most aggressive, equal pay laws in America. Under the new Fair Pay Act, employees will be restricted from paying their employees of the opposite sex lower pay rates for substantially similar work. Initially, the law was limited. It restricted employees from paying their employees of the opposite sex within the same establishment. The employer’s burden of defense has also been increased. They must be able to prove that the pay differential is due to a reasonable application, such as a merit system, seniority system, or a factor such as education level, and a system that measures earnings by quality or quantity of production. This new law expands the exposure of the employees through the following ways.

Record Keeping

Under the old Fair Pay Act, employers were expected to keep records of job classification, wage rates, and other employment terms and conditions of their employees for two years. The new Fair Pay Act extends the period in which these records must be kept from two years to three years.

Increased Wage Transparency

This new revision also seeks to discourage pay secrecy by prohibiting employers from enacting policies, rules or engaging in conduct which stops employees from discussing their wages with other people, asking about the wages of other employees, disclosing their wages, or encouraging and aiding other employees to exercise their rights in accordance with the act. No individual, including the employer, is obliged to reveal the employee’s wages.

Retaliation Claims

The new Fair Pay Act forbids employers from discriminating against, retaliating, or discharging employees who choose to invoke their rights under the new Fair Pay law or those who encourage other employees to invoke theirs.

Removal of Same Establishment Requirement

It will no longer be a requirement for employees to demonstrate that they received a lower wage compared to an employee who is a member of the opposite sex and works in the same organisation. As an alternative, employees can state claims by showing that they are paid less than employees of the opposite sex who work in the same establishment.

Equal Work versus Substantially Similar Work

Under the old Fair Pay Act, employers were able to avoid liability by demonstrating that male and female did not carry out equal work. However, the new Fair Pay Act changes from equal work to substantially similar work. This new law does not give a clear definition of substantially similar work, except where it states that substantially similar work should be viewed as a combination of effort, skill and responsibility.


1. Employees who are receiving less than what they are entitled to are entitled to recover the remainder of the wages, attorney’s fees and cost, similar amount as liquidated cash.
2. Employees who have been discriminated, retaliated against or discharged due to the fact that the employees reacted in protected manner are entitled to reimbursement or reinstatement of lost wages, equitable relief or work benefits including interest.
3. To prepare for the new requirements, the employees should begin taking the following steps.

  • Perform a wage audit to establish if there are any wage discrepancies in the company, which are not justified by differences in education or training.
  • Create a draft, which includes updated job descriptions to reflect accurately the duties and responsibilities, which come with a particular position.
  • Update all the handbooks, training programs and existing policies to communicate the commitment of the employer to eliminating gender based pay discriminations for related work and also ensure that the employees are not restrained from discussing their pay.
  • Train the managers so that they do not discipline the employees for either discussing or inquiring about the wage rates.
  • Retain all the records, which relate to the employee’s past performance, wages and raises within the last three years.

Talk to Bay Area Attorney Daniel Vega

If you are caught up in an employment dispute and you are looking for an or a San Francisco employment lawyer to assist you with your job or discrimination related issue contact Vega Law today via our online contact form here. Our team will ensure that you are well represented and your rights are protected at all times. Give us a call toll free at (866) 471-6847 to set up a free consultation.