California Governor Expected To Sign Fair Pay Legislation

Governor Expected To Sign Legislation Giving Women More Tools To Challenge Gender-Based Wage Gaps. According to the Associated Press, California Gov. Jerry Brown (D) is expected to sign a bill passed by the state legislature, the Fair Pay Act, which would give women new tools to challenge gender-based pay discrimination and make it illegal to discriminate against women or retaliate against them for asking how much their co-workers are paid. The bill would also make it much easier for all workers to file pay-discrimination claims:

Female employees in California are poised to get new tools to challenge gender-based wage gaps and receive protection from discrimination and retaliation if they ask questions about how much other people earn.

A bill recently passed by the Legislature and that Gov. Jerry Brown has indicated he will sign won't suddenly put all women's salaries on par with men's or prod employers to freely disclose what every employee makes, which could make it easier for workers to mount pay discrimination claims.

But the legislation expands what supporters call an outdated state equal pay law and goes further than federal law, placing the burden on the employer to prove a man's higher pay is based on factors other than gender and allowing workers to sue if they are paid less than someone with a different job title who does “substantially similar” work.

[...]

California's pending Fair Pay Act stipulates employers can justify higher wages for men only if the pay is based on seniority, a merit system, quantity or quality of production, or any other “bona fide factor other than sex.” It cleared the Legislature with bipartisan support and the backing of the state Chamber of Commerce.

The legislation would also make California one of a several states to prohibit employers from discriminating or retaliating against a worker for asking how much her counterparts earn, said state Sen. Hannah-Beth Jackson, D-Santa Barbara, who sponsored the bill. A similar provision in Congress has stalled for years. [Associated Press, 9/20/15]

Wall Street Journal Op-Ed Dismisses Gender Pay Gap As A “Myth,” Calls Fair Pay Act “Economically Foolish”

Wall Street Journal: Gender Based Wage Gap “Is Illusionary.” A September 30 op-ed in The Wall Street Journal falsely dismissed the gender pay gap, calling the California Fair Pay Act “economically foolish.” The article baselessly stated that the legislation would create more red tape for businesses and that “women's employment could decline” as a result of new regulatory burdens:

When it comes to economically foolish laws, California is second to none. A good example is the California Fair Pay Act, which Gov. Jerry Brown is expected to sign in coming days.

This bill, which the California senate unanimously passed in August, is a state version of the Paycheck Fairness Act that the U.S. Congress rejected in 2014. Like its national counterpart, it is an aggressive attempt to eradicate a wage gap between men and women that is allegedly due to discrimination in the workplace. But this wage gap is illusory, and the legislation will have unintended consequences, including for women.

[...]

What California's Fair Pay Act will do, however, is make the state, already notorious for regulation and red tape, a more difficult place to do business. Companies must now ensure that every penny of wage differential between the men and women they employ is attributable to bona-fide differences in education, training, experience, quantity or quality of work, and so on. Referring to the countless factors at play, Harvard economist Claudia Goldin has said “it's not checkable.” Yet even attempting to do so will only add to companies' already substantial regulatory-compliance budgets.

Some of these factors--quality of work, for instance--are inevitably subjective, yet trial lawyers will swoop in to turn every conceivable pay difference into a lawsuit. Employers who cannot “prove” objectively that one employee's work was better than another's may face costly penalties. Many will surely pay to settle these lawsuits instead of taking them to court.

All of this money would be better spent by businesses to hire more workers or raise wages, including for countless women. Ms. Goldin has even suggested that women's employment could decline. [The Wall Street Journal, 9/30/15]

California News Media Explains Why A Fair Pay Law Is Needed

Orange County Register: Fair Pay Act Will Enable Women To Challenge Pay Discrepancies. As reported in a September 4 article from The Orange County Register, the Fair Pay Act will help women challenge their employers over pay disparities, noting that women often do not know how to challenge these discrepancies and that the law allows employees to compare their wages at a larger scale within the company:

Supporters say women often fail to challenge pay gaps because they don't know they exist. Farrell said many of the women who call her organization's hotline say they are too scared to discuss their colleagues' pay with their bosses.

In addition, the legislation closes a loophole in existing law by allowing people who work for employers with multiple locations to challenge their pay based on the wages of workers at other sites.

Farrell's organization isn't typically on the same side as the business community, but in this case it was. The bill had the support not just of labor groups but also the California Chamber of Commerce.

The chamber dropped its initial opposition after getting additional clarity on the exceptions under which an employer may provide differential pay.

“We are hopeful that SB358 will limit litigation as it provides an objective criteria for employers at the outset to determine the pay base for employees and make sure those are not determined based on gender,” Chamber policy advocate Jennifer Barrera said in a recent statement. [The Orange County Register, 9/4/15]

Contra Costa Times: “Equal Pay Bill Is Welcome, Long Overdue.” An editorial in The Contra Costa Times stated that the Fair Pay Act “greatly strengthens the state's standards for ensuring gender pay equity in the workplace,” arguing that it should be a model for other states:

Equal pay for equal work should be a bedrock concept in every single workplace in America. Period. Using gender as a basis for establishing a pay scale is wrong. Exclamation point.

To be fair, California already has laws governing some gender pay issues and is light-years ahead of other states on the issue. But Senate Bill 358 by Sen. Hannah-Beth Jackson, D-Santa Barbara, intends to close remaining gaps in that existing law.

It tightens the language by saying that women must be paid equally for doing “substantially similar” work. Existing state law says that the pay has to be the same only if the work is “exactly” the same, which, according to Jackson, “allowed for a lot of excuses.”

The new law would force employers who get charged with pay discrimination to prove that they are paying a male worker more than a female counterpart because of seniority or merit or some other reason that is considered “legitimate.”

Yes, we understand that the term “substantially similar” has plenty of room for interpretation, especially in courts of law down the road. But, as much as anything, this new law's change in language is a statement of intent by the Legislature that California stands solidly against blatant pay discrimination.

[...]

Jackson said she hopes this bill can be used as a model for other states. We think it not only can be, but should be. [The Contra Costa Times, 9/1/15]

Peninsula Press: New Equal Pay Bill Could Benefit Latinas In Silicon Valley. A March 30 article from the Stanford Journalism program's Peninsula Press argued that Latinas in Silicon Valley would benefit from equal pay legislation in California. The article reported that Latinas face a huge pay discrepancy, making on average 35 percent of what white men make, and just 49 percent of what white women make:

As a new proposal to close the gender wage gap awaits its first hearing in the California legislature, Latinas in the region may have much to gain from the approval of this bill, the California Fair Pay Act.

[...]

The high concentration of Latinas in low-wage jobs throughout the nation explains only part of the disparity, said Noreen Farrell, executive director of Equal Rights Advocates, based in San Francisco.

“There's also an intersection of race and sex discrimination in every workplace. Especially in workplaces with very few Latinas in management positions like technology and finance,” said Farrell, pointing to Silicon Valley's concentration of both sectors. [SFGate.com, 3/30/15]

Sacramento Bee: “Senators Deserve Thanks And Congratulations” For Passing Pay Equity Law. A May 27 editorial in The Sacramento Bee argued that pay equity has never beenachieved, despite federal laws, due to large loopholes which the California Fair Pay Act would close:

More than a half-century after the federal Equal Pay Act outlawed wage discrimination based on gender, women in this country continue to be underpaid.

From hotel maids to Hollywood moguls, a woman's work is just about never compensated at parity with a man's, partly because of loopholes that have evolved to block women from effectively forcing the issue.

[...]

That sounds momentous, but the truth is, a fix this obvious should have been long since accomplished. The California Fair Pay Act is just a slightly tougher state version of the federal paycheck fairness law that Congress can't seem to make happen.

It fixes technicalities that had prevented women from challenging pay inequities, for example, at chains with multiple job sites, such as supermarkets, and at workplaces where men and women were doing essentially the same work under different job titles - as janitors and maids, for instance.

It also makes it crystal clear that employers can't retaliate against workers for sharing salary information. And it requires employers to prove that wage differences are due to legitimate business necessity, such as superior education or experience, and not gender-driven. [The Sacramento Bee, 5/27/15]

Research Supports The Need For Fair Pay Legislation

Economic Policy Institute: “Women Still Earn Less Than Men Across The Board.” According to an April 7 report from the Economic Policy Institute (EPI), women's hourly wages are still less than men's “across the board” at every level of income, but the disparity expands as incomes rise:

The figure below shows hourly wages in 2014 for men and women across the wage distribution. At every decile, men out-earn women. At the median, women's hourly wages are only 83 percent of men's hourly wages.

Though the gap between men and women's wages is smaller for lower-wage earners, there is still a significant gender wage gap at all levels of the wage distribution, particularly at the middle and the top. To close this gender wage gap, women need to see wage growth faster than their male counterparts. Although women have seen modest wage gains in the last several decades, the main reason the gender wage gap has slowly narrowed is that the vast majority of men's wages have stagnated or declined. The best way to close the gender wage gap is for both men and women to see real wage increases, with women at a faster rate than men. Truthfully, all workers are sorely in need of a raise. [Economic Policy Institute, 4/7/15]

AAUW: The Gender Pay Gap Is Not “Likely To Go Away On Its Own.” According to a report issued in October from the American Association of University Women (AAUW), the gender pay gap has narrowed in recent years, but still persists and “does not appear likely to go away on its own.” The report highlights how the wage gap affects “women from all backgrounds, at all ages, and of all levels of educational achievement”:

[American Association of University Women, Fall 2015]

White House: Gender-Based Pay Gap Grows Over A Worker's Career. According to an April 14 fact sheet from the White House, as workers advance in their careers, the pay gap between men and women grows, arguing that “increasing pay transparency can help insure non-discrimination” when it comes to wages. Crucially, the fact space sheet highlighted that the gender pay gap remains “even after accounting for time out of the workforce and job tenure” (emphasis added):

Young people tend to start their careers with more similar levels of earnings and over time the gender gap grows. While some of the growth in the pay gap is because women are more likely to take time out of the labor force and work fewer hours, a pay gap remains even after accounting for time out of the workforce and job tenure. Women get fewer raises and promotions, partially because they negotiate less. But even when women do negotiate, they are likely to receive less than men or be penalized for violating social norms.

While the gap in negotiated salaries are small in situations where bargaining expectations are clear, when expectations and norms are not clear, women receive less than men. On this dimension, increasing pay transparency can help ensure non-discrimination, since even though employers are prohibited from discriminating, in cultures of pay secrecy, it is more difficult to enforce non-discrimination requirements. In addition, other work has also found that women are more likely to be penalized for initiating negotiations. This type of implicit bias leads to gaps that grow over a woman's lifetime. [WhiteHouse.gov, 4/14/15]

World Economic Forum: On Gender Equality, United States Ranks 65th Out Of 142 Countries Surveyed. According to an October 2014 report by the World Economic Forum that examined gender equality worldwide, the United States ranks 65th in out of 142 countries studied, and has a “wage equality score” of only 66 percent -- meaning American women earn only two-thirds of what American men earn for comparable work. The report, which was based on nine years of data, found that there has been “only a small improvement in equality for women in the workplace” since the WEF began its surveys on the issue in 2005, and predicted that women won't see full gender equality in the workplace until at least the year 2095. [World Economic Forum, October 2014]

Gallup: Americans Say Equal Pay Is Top Issue For Working Women. According to a September 2014 poll conducted by Gallup, "[n]early four in 10 Americans say equal pay is the top issue facing working women in the United States today.That sentiment was shared by both men and women - 41 percent of women and 37 percent of men agreed that equal pay is “the most important issue[] facing working women.” [Gallup, September 2014]

IWPR: “Equal Pay Would Cut Poverty In Half For Families With A Working Woman.” According to an analysis from the Institute for Women's Policy Research (IWPR), “if working women earned the same as comparable men,” the poverty rate would be cut “in half for families with a working woman”:

[Institute for Women's Policy Research, accessed 10/1/15]