There has been a major culture shift in this country in the way we discuss pay; once a subject rarely discussed will become easily accessible on the internet at least with respect to larger companies. California’s Gender Pay Transparency Act, Assembly Bill (AB) 1209, if signed by Governor Brown this October would require private employers with 500 or more employees to compute the wage differences by gender for exempt employees and board members located in California and file a report with the California Secretary of State who would then publish the information on a public website. AB 1209 has passed both houses and is on its way to Governor Jerry Brown’s desk to be signed or vetoed. If signed, the Act would require employers to collect and compute the difference between wages of male and female exempt employees in California using the mean and median wages in each job classification or title; the difference between the mean and median wages of male board members and female board members located in California, and the number of employees used for these determinations and report this information every two years beginning January 1, 2020.
The proponents of AB 1209 argue that transparency requirements increase awareness of pay gaps and result in shrinking the gaps. Opponents including the California Chamber of Commerce and a coalition of organizations contend that the data will likely demonstrate wage disparity of employees in different job classifications and/or titles according to gender, but will not automatically mean a discriminatory motive exists. The Chamber and coalition argue that collecting pay data according to job titles and descriptions are not determinative of whether two jobs are the same for the purposes of equal pay under Labor Code 1197.5 or the federal Equal Pay Law. Opponents argue that posting salary information on the internet will expose employers to unnecessary investigations and lawsuits for alleged wage discrimination and unequal pay where none exists. The Governor has until October 15, 2017 to sign or veto AB 1209.
AB 1209, and recent class action lawsuits filed against prominent employers including the recent Google case, emphasize the critical importance for employers of any size to review their compensation practices and conduct to ensure all employees are compensated in compliance with federal, state and local laws. If you have questions about whether your company is complying with state, federal and local laws regarding equal pay please give our employment attorneys a call.