How to get ready for California’s new Equal Pay Law

California employers have the rest of the year to get ready for a new equal pay law that creates stricter standards for gender pay equality.

The new law, which takes effect on Jan. 1, 2016, amends California’s Equal Pay Act to prohibit an employer from paying employees of one sex lower than employees of the opposite sex for “substantially similar work.” 

If a wage differential exists, the law will allow employers to avoid liability if they can show that the wage differential is based on:

• A seniority system
• A merit system
• A system that measures earnings by quality or quantity of production
• Some other bona fide factor other than sex such as education, training, or experience

It’s important that organizations take steps now to prepare for the new law. According to various labor law experts steps employers can take before January 1 to minimize their exposure to claims of pay discrimination include:

1. Begin examining your current pay rates for the same or similar jobs to see if disparities exist based on sex. Companies that involve their legal counsel can ensure that the review is protected by attorney-client privilege.
2. Make sure your compensation guidelines specifically prohibit pay discrimination.
3. Provide guidelines and training to those making compensation decisions so that they understand the new requirements.
4. Do not prohibit employees from discussing their compensation. That was illegal in California before and still is.

If you have specific questions about your organizational circumstances seek expert advice.