Join The OFCCP Institute for a discussion of the new California Fair Pay Act and the New York State Achieve Pay Equity and how these laws may impact OFCCP’s interpretation of pay discrimination.
On October 6, 2015 California Governor Jerry Brown signed the California Fair Pay Act (“the Fair Pay Act”), arguably the most aggressive gender pay discrimination law in the country. The law modeled after the Paycheck Fairness Act, amends California’s Equal Pay Act (Labor Code Section 1197.5) on January 1, 2016. On October 21, 2015, New York Governor Andrew Cuomo signed into law a group of bills collectively named the “Women’s Equality Agenda” which included substantial revisions to New York’s equal pay law. The Achieve Pay Equity legislation effective on January 19, 2016 models the changes proposed by the federal Paycheck Fairness Act.
Some of the important changes in the new laws are that
- In California employees of the opposite sex will have to be paid for “substantially similar work” rather than the current “equal work” and the “same establishment” limitation is eliminated.
- The New York law retains the “equal pay” and the “same establishment” language but expanded the definition of “same establishment” to cover all the employers’ jobs within a county.
- Both laws substantially amend the “bona fide factor other than sex” first by adding “education, training, and experience” and then by providing that the factor must not be based on sex-based differential in compensation; must be job-related; and consistent with business necessity. Both then provide that the factor will not apply if an employee can show that there is an alternative business practice that serves the employer’s business purpose and does not have a disparate impact based on sex.
- California’ definition of “business purpose” is much more restrictive than New York’s version.
- Bona fide factors must be applied reasonably and account for the entire wage differential.
- Both add pay secrecy language with New York’s language being nearly identical to that used by OFCCP while California’s language is more employee-friendly.
The changes made by the California Fair Pay Act and New York Achieve Pay Equality Act raise many questions for employers which will need to be answered before January 2016. Let our experts help you determine how best to comply.