Labor Code Legislation Mandating Equal Pay for “Substantially Similar

Labor Code Section 1197.5 has been amended by SB 358 and will become effective on January 1, 2016. The law prohibits employers, including school and community college districts, from paying an employee wage rates less than rates paid to the opposite sex for “substantially similar work.” The work is to be reviewed as a composite of skill, effort, and responsibility, and must be performed under similar working conditions.

An employer paying different pay rates must demonstrate one or more of the following factors to avoid a violation:

  • Seniority system;
  • Merit system;
  • System measuring earnings by quantity or quality of production; or
  • A bona fide factor not based on or derived from a sex-based differential in compensation and is consistent with a business necessity (ex. different education, training, job-related experience).

The factor or factors relied upon by the employer to disprove disparity in wage rates must account for the entire wage differential.

The law also prohibits employers from discharging, discriminating, or retaliating against any employee for actions taken to invoke or assist in enforcement of this section. Employers shall not prohibit the following employee conduct:

  • Disclosing their own wages;
  • Discussing wages with others;
  • Inquiring of another’s wage; or
  • Aiding or encouraging any other employee to exercise their rights under this law.

An employee who has received lower wages than the opposite sex for doing substantially similar work or has been discharged, discriminated, or retaliated against for conduct protected under this section, may bring a civil case against the employer or file a complaint with the Division of Labor Standards Enforcement.

Employers who violate the law by paying lower wages to the opposite sex for doing substantially the same work, are liable to the employee for the amount of wages plus interest the employee lost as a result of the violation, plus an additional equal amount as liquidated damages. The employee will also receive attorney’s fees and costs. If the employee accepts payment in full, this shall constitute a waiver of the employee’s cause of action for unpaid wages plus interest, an equal amount in liquidated damages, and attorney’s fees and costs. A civil suit for payment of different wages must be brought within three years of the cause of action.

Employers who violate the law, by discharging, discriminating or retaliating against an employee for acting in any manner to enforce the law, are liable for reimbursement for lost wages and work benefits including interest, reinstatement of employment, and any other appropriate equitable relief. A civil suit resulting from an employer’s discharge, discrimination or retaliation against employee must be brought within one year of the cause of action.

Employees who file a complaint with the Division of Labor Standards Enforcement under this section grant the Division the authority to commence and prosecute a civil action on behalf of the employee to recover unpaid wages, liquidated damages, and shall be entitled to recover costs of suit.

Districts will not be entitled to reimbursement, pursuant to Section 6 of Article XIIIB of the California Constitution, for costs related to violations of this section.

If you have any questions or need further information relating to SB 358, please contact our office.

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