NEW YORK – The Wall Street Journal reports that starting this Friday, California employers will face “the nation’s strictest fair-pay law,” which seeks to close the wage gap between men and women and would require employers “to prove they pay both genders equally for ‘substantially similar’ work.”
The news source writes that the new law has prompted employers to reevaluate how they pay and classify workers; and some are puzzled by what “similar” work means legally, such as whether a marketing manager and a supply-chain manager have roughly equivalent jobs. Employers who violate the law could be forced to pay back wages and interest, as well as an equal amount in additional damages. Data cited in the legislation says that women in California earn an average 84 cents for every dollar earned by men.
According to statisticians who specialize in pay audits, the Journal reports, assessing pay is difficult because most HR systems don’t capture information needed for grouping similar jobs. These systems also can fall short on obtaining enough data on individuals that account for differences in pay, such as seniority, experience or education.
“It takes time to document these differences and confirm there are bona fide factors other than sex driving any kind of pay gap,” Elaine Reardon, a director at Resolution Economics, told the news source.
The Journal notes that Gov. Jerry Brown signed the Fair Pay Act into law in October, expanding a 1963 federal regulation that prohibits companies from paying men and women differently for equal work. Legal experts say the “similar work” provision is important because the “equal work” rule was too narrow and allowed employers to use any differences in job responsibilities as a rationale for pay disparities.
“Most differences in pay scales between men and women aren’t because they’re in the same job, but because they’re in female- or male-dominated job categories,” Martha West, professor of law emerita at the University of California, Davis, School of Law, told the Journal. “It will take several court decisions or agency decisions to work out how broadly the term ‘similar’ will be defined.”
West continued that the new law also bans employers from penalizing workers who discuss salaries with their colleagues, which could lead to more workers challenging pay disparities internally before legal action for formal complaints.
Women need to “talk to each other and talk to their male colleagues,” West told the news source, adding, “And if women start organizing at work, that will put pressure on employers to correct differences before anyone has to sue.”