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How to Prepare for California's Fair Pay Act

Starting January 1st, the strongest equal pay law in the country goes into effect in California. The state's Fair Pay Act, signed into law by Governor Jerry Brown in October, is designed to strengthen existing equal pay laws and provide robust new protections for workers. Among the law's mandates are a requirement for equal pay for "substantially similar" work, a whole lot of protections for discussing wages, and stronger legal recourse for employees denied equal pay.

If you do business in California, it's time to prepare. Here's what you need to know.

From Equal Work to Substantially Similar Work

The Fair Pay Act seeks to move beyond "equal pay for equal work" to "equal pay for substantially similar work." The law corrects a failing of the state's Equal Pay Act of 1949. That law gives employees the right to equal pay for equal work, but "equal work" has been taken to require the exact same title in the same establishment. Thus, while a female worker does the same role as her male counterpart, she could be paid less if her title is different. That's no longer the case under the new rule. Now, that work need only be "substantially similar" in order to qualify for equal pay.

Determining Substantially Similar Work

Simply put, the law requires employers to pay men and women equally. If there is a difference in pay, it must be fully explained by the reasonable application of a seniority system, merit system, quantity or quality measurements, or factors such as education, training, or experience.

There's some wiggle room should differences in pay emerge, but the burden on employers to explain those differences will be much greater. Employers must show that factors influencing different pay are gender neutral, related to the job, and a business necessity. Employees can rebut these defenses by showing that alternative practices are available.

Get Ready to Talk Salary

The law also greatly increases wage transparency. Companies are forbidden from establishing rules or procedures that prohibit workers from discussing their wages, your wages, and from asking about others' wages. In-side counsel might want to advise company managers to get ready for some awkward conversations come 2016.

And Go to Court

The Fair Pay Act also strengthens workers' ability to go to court when they think they're paid unequally or have suffered retaliation for asserting their rights under the act. A successful claim can result in double back pay, interest, compensation for lost benefits, attorney's fees and equitable relief.

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