Since passing the California Fair Pay Act (“CFPA”) on October 6, 2015, California has remained a trailblazer in its efforts to address and decrease gender pay inequity. The CFPA requires all employers pay employees performing “substantially similar work” the same wage regardless of gender, ethnicity or race. The CFPA also requires employers to provide the pay scale for a position to an applicant who makes a reasonable request for it, prohibits employers from requesting an applicant’s prior salary history and from relying on an applicant’s salary history alone to justify a disparity in compensation “based on sex, race or ethnicity.”
After enacting the CFPA, the California Commission on the Status of Women and Girls launched the California Pay Equity Task Force (“Task Force”) to monitor the implementation of the CFPA and facilitate dialogue on legislative modifications to California law. On September 10, 2018, the Task Force released written guidance for employees, employers and unions on how they may comply with the CFPA. The guidance includes, amongst other things, a myriad of tips and recommended practices for employers seeking to comply with the CFPA, including:
- Regularly reviewing and updating job descriptions to ensure they accurately reflect a position’s duties and responsibilities (written job descriptions are pivotal in determining whether two employees are performing substantially similar work and serve as helpful evidence of an employer’s compensation decisions);
- Educating managers on the factors they may rely upon in making decisions regarding an employee’s compensation;
- Documenting any and all compensation decisions, the grounds for such decisions and the basis for any differences in compensation between two or more employees (any such documents should be retained by employers for at least four (4) years); and
- Periodically auditing employee wage practices to identify any substantial differences in wages amongst employees who perform substantially the same work (if any such disparities are found, employers should immediately make the necessary adjustments to remedy them).
Employers should review their hiring and compensation practices to ensure compliance with the CFPA, implement the practices recommended above and consult with counsel regarding any questions or concerns they may have.