CalChamber-Supported Gender Equity Pay Bill to Governor

A California Chamber of Commerce-supported bill that seeks to eliminate pay disparity based on gender is on its way to Governor Edmund G. Brown Jr.

Governor Brown’s executive secretary, Nancy McFadden, announced on Twitter last week that the Governor would sign the legislation once it reaches his desk.

SB 358 (Jackson; D-Santa Barbara) passed the Senate yesterday on a unanimous vote, 39-0, ensuring that women are paid equally for work that is substantially similar to the work of their male colleagues, and are not retaliated against if they discuss or ask how much their male colleagues are paid.

CalChamber Policy Advocate Jennifer Barrera joined Senator Hannah-Beth Jackson, who also chairs the California Legislative Women’s Caucus,at a news conference on the bill last week.

“Our members understand the importance of ensuring that employees should be paid equally for equal work and we believe that SB 358 emphasizes that point and clarifies it,” said Barrera during the August 24 news conference. “We also believe that SB 358 provides a great balance between making sure there is no gender inequity in pay, but also leaving flexibility for an employer to reward employees for education, skill, training experience with regard to compensation as well.”

According to a CalChamber analysis, SB 358 seeks to strengthen California Labor Code Section 1197.5, which precludes an employer from discriminating against an employee in pay on the basis of gender.

Currently, Section 1197.5 mandates that an employer shall provide equal pay for equal work, unless a bona fide factor other than gender justifies the differential. In an effort to eliminate the risk of a stringent interpretation of this standard, SB 358 proposes to amend this section to specify that an employee shall not be paid less than another employee who is performing “substantially similar” job duties, unless a bona fide factor exists.

CalChamber believes this requirement will achieve the intent of the law and eliminate any employer from seeking to justify a wage differential through meaningless differences in job duties under the guise that such positions are not “equal.”

More Clarity

SB 358 also seeks to provide further clarity to the term “bona fide factor” under which an employer may provide differential pay for a legitimate business purpose, such as to compensate an employee who has more extensive training, education or experience. The CalChamber believes this clarification will help employers navigate their pay structure and avoid unnecessary litigation regarding what business purposes qualify as a bona fide factor.

The CalChamber believes that employees who are similarly situated and who generally perform the same duties or the same position should be compensated in the same manner, regardless of any protected classification, including gender.

“We are hopeful that SB 358 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,” said Barrera.