[REDACTED], Are You Talking [REDACTED] At Work About Salaries?

*Original title at bottom:

If [California Female workforce is] not talking about salary, you probably should be. Were you even aware that it is now a protected activity? If your company previously had a policy prohibiting such conversations, in California that prohibition became illegal as of January 1, 2016. So pull up a chair and a cup of coffee, and have a little chat with “Joe” in the next cubicle, because that’s the only way we’re going to close the pay gap.

The Facts About California’s Fair Pay Act

In the second entry of our continuing mini series on changes in Employment Law for 2016, our topic today is Equal Pay.

In a recent study, Pew Research Center reported that “72% of women and 61% of men said ‘this country needs to continue making changes to give men and women equality in the workplace.’ ”

Despite efforts to remedy it, the “gender gap” in pay scale persists. Research would indicate that it impacts millennials less than their older counterparts. Women in this country working full-time earn only about 78 percent of their male counterparts’ wages. For African-American and Latina women, the gender pay gap is greater. Studies show African-American women reportedly earning 64 cents on the dollar.  Latina women earn 56 cents for every dollar earned by a non-Hispanic Caucasian male.

There still remains a size-able pay gap, even if you take into account valid reasons for disparity, such as:

  • an individual’s skill set
  • actual tasks performed
  • education
  • experience

There is also evidence that discrimination is a large factor in the lingering pay disparity between the genders.  American women comprise about fifty percent of the workforce. Therefore, one must conclude that pay discrimination is a real and persistent problem that continues to shortchange working women and their families.

The New Law

Enter Senate Bill 358 (SB-358), which went into effect on January 1, 2016 in the State of California. The bill was passed to narrow the wage-gap by strengthening the protections for persons complaining of wage discrimination. Any employee who has been arguing for fair pay, or one who has openly discussed salary with a co-worker, is now protected from retaliation by the employer for doing so. Should that employee be terminated, the employer now faces a stronger claim for discriminatory retaliation.

Employees who find themselves the subject of pay-based discrimination can make claims for reinstatement and reimbursement of any lost wages and work benefits. Such a claim can go back the preceding three years, and includes substantial penalties for the employer, who will be “liable to the employee affected in the amount of the wages, and interest thereon, of which the employee is deprived by reason of the violation, and an additional equal amount as liquidated damages.”

Achieving gender equality requires the engagement of women and men, girls and boys.  It is everyone’s responsibility. – Ban Ki-moon

The Federal Equal Pay Act

SB 358 is intended to bolster the Federal Equal Pay Act signed by president John F. Kennedy in 1963. It heightens the law’s effectiveness in two ways. First, it establishes “substantially similar work” as the standard for equal pay.  Second, the bill allows for strong protections for employees who discuss their salary levels with co-workers. They can use that information to compare their salaries to those of their male counterparts. They can even use salary data from other sites within the company.

The only feature the bill lacks is a provision to force employers to disclose payroll data to employees. Other than this bill, the most recent substantive law enacted against gender-based wage discrimination was in 1963. Then-president John F. Kennedy signed into law the Equal Pay Act, which also fought to eliminate gender-pay imbalance.

The Lilly Ledbetter Fair Pay Act

The Lilly Ledbetter Fair Pay Act of 2009 addressed the 180-day statute of limitations for filing an equal-pay lawsuit regarding pay discrimination, allowing it to reset with each new paycheck affected by the underlying discriminatory action. The law was passed to address Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), a U.S. Supreme Court decision that established that the existing statute of limitations for presenting an equal-pay lawsuit began on the date that the employer made the initial discriminatory wage decision, not at the date of the most recent paycheck. These laws combine to make a pretty strong legal basis for women to enforce equal pay in their own careers.

While much remains to be done to achieve full equality of economic opportunity–for the average woman worker earns only 60 percent of the average wage for men–this legislation is a significant step forward. – John F. Kennedy

Current Data

According to the U.S. Census Bureau, there is an average gap of $10,762 between full-time working men compared to full-time working women. The gap exists in the San Francisco Bay Area. A 2014 AAUW report shows that in Hayward, males make an average of $70,589, compared to women, who only make $55,150, meaning full-time working women only make 78.1 percent of what men make. The highest gender-based wage gap in California comes from District 17 which includes the cities of Fremont, Milpitas, Sunnyvale, Santa Clara, Newark, Cupertino and San Jose, also known as the Silicon Valley, where women only make 65.8 percent of what men make.

Out With the Old

Opponents of the old law have observed that the norm of secrecy that prevailed under that law had significantly disadvantaged people who were paid less than others. “The idea behind the new law is to create an environment where it is permissible to discuss pay, particularly when someone suspects that he or she is being paid less than someone else, doing substantially similar work.

Critics would argue that the new law will mean more employees taking more bosses to courts – which will lead to more litigation and thus could further weaken the business climate in California. However, lawsuits arise only where the employer fails to follow legal requirments on its own initiative. Companies such as the Gap, SalesForce and others, have proactively performed company-wide audits to determine if they were engaging in pay disparity between the genders, and they have corrected any instances found prior to the law’s enactment at the beginning of this year. The law is thus easy to follow, if a company genuinely wishes to level the playing field for its workforce.

The Takeaway

So if you and “Joe” have a substantially similar job, with substantially similar tasks, have a chat, and find out if your pay is on a par with his.  Should your boss give you a hard time, or should you not like the answers you get, give the team at Lazear Mack a call at 510-735-6316, or complete our online web form  so we can evaluate your claim and let you know on which side of the gap you stand.

Lazear Mack, LLP
Employment Law Attorneys
436 14th Street, Suite 1117
Oakland, CA


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*”Ladies, Are You Talking With the Guys At Work About Salaries?” Was the original tongue-in-cheek title of this blog. Apparently, Facebook has a problem mentioning gender, so we’ve amended the title to this article.  If the very mention of gender is considered “profane” by an algorithm, perhaps that goes a long way to explain why women find themselves constantly lagging behind the men.

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