On October 6, 2015, California’s Governor Edmund G. Brown, Jr. signed into law Senate Bill (SB) 358, legislation intended to increase wage transparency and which will make it more difficult for an employer to defend against an equal pay claim. This measure, which amends Section 1197.5 of the California Labor Code relating to private employment, will take effect on January 1, 2016.  When it takes effect, California’s law on this subject will be one of the strongest equal pay laws in the nation.

SB 358 borrows significantly from the yet-to-be-passed federal Paycheck Fairness Act, a bill that has stalled in Congress the last several years.  SB 358 substantially relaxes the evidentiary burden of proof on employees complaining of unequal pay based on their gender.  Before the amendment, an employee had to demonstrate he or she was not being paid at the same rate as someone of the opposite sex at the same establishment for “equal work.”3  Under SB 358, the requirement of “same establishment” has been deleted, and the employee need only show he or she is not being paid at the same rate for “substantially similar work.”  Substantially similar work means a composite of skill, effort, and responsibility, performed under similar working conditions – but it need not be the same exact job.

Once the employee has made such a showing, SB 358 shifts the burden to an employer to affirmatively demonstrate the pay difference being complained about is based on any or all of these specific factors:

  1.  a seniority system,
  2.  a merit system,
  3.  a system that measures earnings by quality or quantity of production, or
  4.  a bona fide factor other than sex, such as education, training, or experience.

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