Dissecting the CFPA

In another blog, Art Gutman provides an overview of the California Fair Pay Act (CFPA). The CFPA prohibits California employers from paying employees differently due to sex. This is not new, given existing law; however, some of the specifics outlined in the CFPA are unique.

One example relates to grouping employees for analysis based on “substantially similar” work. More specifically:

An 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

For federal contractors, this is likely not a new concept in some ways. If you have interacted with OFCCP regarding pay analyses, you may have worked to identify similarly situated employee groups (SSEGs) for your pay analysis groups (PAGs). SSEG development is often a combination of subjective and objective considerations, but the CFPA adds more structure around dimensions of job similarity. As such, how do you determine whether or not jobs are substantially similar?

Industrial and Organizational (I/O) Psychologists are particularly well suited to address this question. I/O Psychologists often collect job-related information as part of a process called job analysis, which can be used to determine job similarity.

A job analysis is the systematic process of collecting and interpreting job-related information for a given purpose – such as assessment development, validation efforts, and/or determining job similarity. This systematic review is accomplished through a variety of data collection methods, such as job observations, documentation review, interviews, focus groups, and surveys. For additional details on job analysis, see this previous DCI blog.

Data collected from a correctly focused job analysis can allow for job similarity analyses to directly and empirically test how similar roles are in terms of skills, effort, responsibility, and working conditions. Given the court’s general acceptance of job analysis as a viable research methodology, a job analysis may be the most defensible approach to determining similarity of jobs along the mandated criteria.

For those of you that will be dealing with the CFPA in 2016, we recommend that you contemplate job similarity along these dimensions, as it could have enormous consequences for the results of EEO pay analyses under the CFPA.

By Eric Dunleavy, Director and Emilee Tison, Consultant at DCI Consulting Group 

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