Now in Effect: Changes to the California Fair Pay Act

1-31-17-now-in-effect-changes-to-the-california-fair-pay-act

The year of 2016 was one of change and transition for many employers throughout the United States. However, for employers in California, it also proved to be the final year to prepare for major changes to the California Fair Pay Act.

 

In a recent blog post, A-Check Global noted that several states throughout the country had passed, or were working to pass, legislation aimed at leveling the playing field when it comes to salary and equal pay. And California, according to the state legislative site, is one of the states joining the list.

 

In 2016, the California Fair Pay Act (CFPA) took effect. However, the amended CFPA, which took effect January 1, 2017, is expanding the law significantly in four key areas: pay equity, pay transparency, record retention and enforcement.

 

In terms of pay equity, the new law expands the existing laws in the following ways:

  • Employee pay may now be compared to the pay of other employees who work hundreds of miles away.
  • Employees can be compared even if they do not hold the same or substantially equal jobs
  • Employers will now be required to justify pay differentials, and the only permitted reasons for pay differences are seniority systems, merit systems, systems that measure earnings by quantity/quality of production and bona fide factors other than sex (education, training, experience, etcetera).

 

The second key area of the law’s expansion, pay transparency, calls for an end to pay secrecy. This means employers can no longer prohibit employees from disclosing/discussing their wages or encouraging other employees to exercise their rights.

 

For records retention, the CFPA requires employers to retain records of wages, pay rates, classifications and other terms of employment for three years.

 

Finally, in the area of enforcement, the CFPA creates an additional private right of action for employees claiming they have been discharged, retaliated against, etc. for engaging in conduct protected by the statute. These employees may also file complaints with the California Division of Labor Standards Enforcement.

 

Employers are solely responsible for ensuring they are in compliance with all federal, state and local laws such as those mentioned above. For more information on these laws, and the effect on your organization’s policies and practices, please consult your legal counsel. A-Check Global provides legal and legislative content for general information purposes only.

 

A-Check Global strives to provide resources regarding current and pending local, statewide and federal laws which may impact employment screening. For more information on how current or pending legislation may affect your employment screening programs, please contact A-Check Global through our contact page, or by phone at 877-345-2021.

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