USA – CALIFORNIA Trends and Developments Contributed by: Sanford Heisler Sharp McKnight, Sanford Heisler Sharp McKnight
Get individualised advice An equal-pay analysis is fact-specific, and much of it is best done under the protection of the attorney- client relationship. Frequently Asked Questions How do I know whether I am being underpaid under California law? Employees should compare their total compensation to that of colleagues of a different sex/gender, race or ethnicity doing substantially similar work, then ask whether any difference rests on a lawful factor such as seniority, merit or experience. A gap that cannot be explained that way may support a claim for dis - criminatory pay. How far back can I recover for unequal pay in California? SB 642 allows recovery for the entire period that a violation persisted, up to six years. The deadline to file is three years from the date of the last violation. Do stock options and bonuses count when comparing pay? For claims under Labor Code Section 1197.5, “wag - es” do now include bonuses, stock, stock options and Restricted Stock Units (RSUs), profit-sharing, allow - ances and most other benefits – not salary alone.
Is a pay gap by itself illegal? A pay gap by itself is not illegal. The law permits pay differences that rest on a bona fide seniority, merit or production system, or a genuine factor other than sex. A disparity is unlawful only when no such justification accounts for it. What if my employer set my pay using my prior salary? California bars employers from relying on salary his - tory to set pay. A starting salary built on lower past earnings can carry an old disparity forward, which is one of the practices the new law and recent litigation are testing. Am I protected from retaliation? Labor Code Section 1197.5 (k) protects employees from retaliation for actions that they take in support of enforcement of the Equal Pay Act. This would include complaints about unequal pay, disclosures or discus - sions about pay, enquiring about other employees’ pay, and aiding or encouraging other employees with potential equal pay claims. Other provisions of the Labor Code, anti-discrimination laws and labour rela - tions law may also protect employees from retaliation for making complaints or reports of pay discrimina - tion, or for discussing pay.
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