Fair Pay Act Case Study

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Equalizing pay rates between men and women has been a legislative objective on both the federal and state level for quite some time. However, the effectiveness of state legislation varies from state to state - depending on the requirements of each state 's laws. Last month, California Governor Jerry Brown signed Senate Bill 358 into law. Many are calling the new Fair Pay Act one of the firmest and most aggressive equal pay provisions in the Nation. The new law will take effect on January 1, 2016, amending Section 1197.5 of the California Labor Code which applies to private employers.

One of the major reasons why the new Fair Pay Act is so strict is that it expands the definition of what constitutes equal work. Previously, California employers
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Further, the law prohibits employers from retaliating against employees who exercise their rights under the Act. An employee who demonstrates that their employer took adverse employment action against them for asserting their rights will be entitled to reinstatement (if the employee was fired or demoted), recovery of lost wages, the interest thereon and an amount equal to that for liquidated damages, in addition to any benefits lost (for example, medical insurance coverage).

The aggrieved employee must file their unequal pay or retaliation suit within one year from the employer 's alleged unlawful conduct. However, the employee is not required to exhaust all administrative remedies (such as filing a complaint with the Equal Employment Opportunity Commission or California Labor Board) prior to initiating their discrimination or retaliation lawsuit.

Given the broader standard for what constitutes wage discrimination based on gender and the strict penalties that come with violations of the new Fair Pay Act, California employers should perform an audit of their wage practices and all compensation-related rules, regulations and policies (including job descriptions and expectations) to ensure they comply with the Act - prior to
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