California is leading the country in its momentum to address gender pay inequity—as evident by the passing of the California Fair Pay Act (CFPA) in October 2015 and the September 2018 release of guidance for employees, employers, and unions on its implementation put forth by California’s Pay Equity Task Force. The following blog provides a summary of the CFPA and the newly finalized resources for its implementation.
The California Fair Pay Act (CFPA) was passed into law on October 6, 2015. The CFPA is an expansion of the Federal Equal Pay Act of 1963 (EPA); it significantly expands the EPA as it relates to which employees can be compared as well as the affirmative defenses that may be used by an employer to rebut a wage discrimination claim. It further stipulates that employers must provide the pay scale for a position to an applicant who makes a reasonable request for that information and that employers cannot:
- Seek salary history, including “compensation and benefits,” of an applicant;
- Rely on salary history information in determining whether to offer employment or what salary to offer unless the applicant voluntarily and without prompting discloses their salary history; or
- Rely on prior salary, by itself, to justify any disparity in compensation based on sex, race, or ethnicity.
Following the passing of the CFPA, the California Commission on the Status of Women and Girls formed the California Pay Equity Task Force—a statewide, multi-stakeholder Pay Equity Task Force. The mission of the Task Force is to:
“engage diverse interests and facilitate an ongoing dialogue about pay equity between employees and their advocates, small and large employers, policymakers, legislators, experts in human resources and compensation practices, industrial organizational psychologists, labor economists, social scientists, and legal and other experts in the public and private sectors.”
According to their website, it is the first Task Force in California to be convened for the purpose of assuring effective implementation of a California state law.
NEWLY APPROVED PAY EQUITY TASK FORCE RESOURCES
After approving the "substance of several draft documents that provide guidance to employers on complying with the CFPA” on January 10, 2018 (described in detail in this DCI blog), the California Pay Equity Task Force officially approved and released guidance for Employees, Employers, and Unions on September 10, 2018. Each of the resources released by the Task Force are described below.
Employee resources focus on helping employees understand their rights with regard to fair pay by providing answers to the following questions:
- What does it mean to be paid fairly under California’s Fair Pay Act?
- How can I find out if I am getting equal pay?
- If I am not getting equal pay, what can I do?
- How do I file a claim for equal pay?
- Am I protected from retaliation if I speak up about equal pay?
A “Job Search” resource is also provided.
Several resources are provided for Employers, as listed below.
- “Why Care about Pay Equity?”
- "Guidance for Employers”
- “How to Promote Pay Equity Culture”
- “Step by Step Equity Evaluation”
- “Infrastructure Data Tool”
- “Tips for Pay Equity Compliance”
Employers may find the “Guidance for Employers” and the “Step by Step Equity Evaluation” particularly useful for ensuring compliance with the CFPA.
The Guidance document provides a helpful roadmap for establishing compensation practices that align with the requirements of the law, including:
- factors to consider for establishing your organization’s compensation policies that facilitate fair and non-discriminatory compensation,
- considerations for setting starting salary and salary ranges,
- strategies for communicating with applicants about starting salary (particularly with regard to avoiding the now-prohibited practice of asking about prior salary), and
- guidance around documentation of compensation decisions.
The Step by Step document provides a guide for evaluating employee wage rates to identify any proscribed differences by gender, race or ethnicity. This guide will be particularly useful for Employers in addressing questions they may have about how to group employees for wage rate comparisons and what factors they can assert as a defensible basis for a wage difference.
For example, the guide puts forth relevant questions an employer can ask to identify jobs that constitute “substantially similar work when viewed as a composite of skill, effort and responsibility.” It provides useful examples that illuminate when two jobs meet or do not meet the “substantially similar” criterion.
It also examines the meaning of “skill, effort and responsibility,” defining each of the three attributes in turn and again providing concrete examples comparing jobs in which the skill required, the effort exerted, or the responsibility demanded may or may not be similar.
Along the same lines, for each factor recognized under CFPA as a defensible basis for a wage difference, the guide articulates the conditions that must be met for the factor to be considered “bona fide” and then offers examples to clarify the discussion. The guide examines, in turn, each of the following factors that an employer can assert to explain a wage difference: seniority, merit or performance, the quality or quantity of production, education, experience and ability, training, and geography.
Lastly, several documents are provided to help unions understand how the CFPA affects their operations and their members, including the following:
- “How Does Pay Equity Affect Unions”
- “Addressing Pay Equity in Collective Bargaining”
- "Pay Equity and Collective Bargaining”
- “How can unions address issues of Pay Equity in the Bargaining Process”
Each of the above-described approved resources can be accessed on the California Commission on the Status of Women and Girl’s website, here.
By Sarah Gilbert, Senior Consultant, at DCI Consulting Group
1 Note that as of October 26, 2018, some of the hyperlinks to the above-cited resources were not operational on the California Pay Equity Task Force website. DCI Consulting reached out to the California Commission on the Status of Women and Girls using the “Contact Us” feature on their website to make them aware of the issue.