California Fair Pay Act

The California Fair Pay Act is found at California Labor Code Section 1197.5(b). This law took effect in January 2016 and makes it illegal for an employer to pay any of its employees at wage rates less than the rates paid to employees of another race or gender for substantially similar work. The law protects employees who want to discuss their wages as compared to other co-workers. Employers must now provide equal pay for employees who perform “substantially similar work when viewed as a composite of skill, effort and responsibility”. This law strengthens the protections employees had under the previously passed Equal Pay Act of 1963.

In one case we have seen, a female employee worked for a hospital for approximately 25 years One day, she was having a conversation with one of her male coworkers, who showed the female employee a copy of his paycheck stub and asked the female employee how much money she made. The male and female employee performed the same duties in the same position for several years. They also began working in the same department at the same time performing the same duties.

As a result of this conversation, the female employee discovered she was paid approximately $10 less per hour than the male employee. The female employee was also of African American descent. When she discovered this, she was so upset that she was put out on leave for three days.

Because she was not paid the same as her male counterpart, this female employee is entitled to the difference between the amount she was being paid and the amount employees of a different race and gender were being paid for substantially similar work. The California Fair Pay Act allows an employee in this situation to recover the difference in pay for up to 3 years. This added up to a lot of money -$10 per hour for 40 hours per week times 52 weeks per year is $20,800. For this female employee, the amount for three years was $62,400.

The California Fair Pay Act also benefited her because she also earned four weeks or 160 hours of Paid Time Off (“PTO”) per year, which should have been paid at the correct rate of approximately $10 more per hour. 160 hours times $10 per hour is $1,600. $1,600 per year times three years is $4,800. Therefore, this female employee’s unpaid wages totaled $67,200.

Another benefit of California’s Fair Pay Act is that the female employee was also entitled to “liquidated damages”. “Liquidated damages” equals the difference in her wages from the other employee who performed substantially similar work, and her costs and attorneys’ fees. (Cal. Labor Code § 1197.5(c).) Other benefits also potentially affected could be her retirement benefits, which were also adversely affected by the failure to pay her as much as the hospital paid the male employee.

Lastly, the employee is also entitled to interest on her unpaid wages at the rate of 10% per annum for the time that she was paid the correct amount. In this case, she was owed interest for 3 years and seven months, which added approximately $14,000 to her claim for damages. (Cal. Labor Code § 218.6.)

What made it even worse was that the female employee had made several requests for raises and salary analysis during her employment, but the hospital. This female employee was long overdue for a salary analysis, but the hospital refused to do it despite her numerous requests.

In order to win an unequal pay case, you must be able to show that you are being paid less than an employee of the opposite sex, another ethnicity or race, who is performing substantially similar work.

If you believe that you are not being paid the same as another employee who is performing the same or similar job duties as you are, please don’t hesitate to call today for a free consultation with one of our California Fair Pay Act lawyers. The consultation is free. Please call us now at (949) 375-4734.