California enacted one of the toughest equal pay laws in the country less than a year ago, and supporters say there are signs it’s starting to work.
Lawmakers already hope to expand the law, which took effect in January after receiving bipartisan support in the Legislature last year. Last month, they passed two bills to build on the law, one to extend some of the its protections to people of color and another to broaden rules against gender-based pay discrimination. Both now sit on Gov. Jerry Brown’s desk.
The new law, the California Fair Pay Act, is part of an ongoing effort by state lawmakers to close the wage gap between men and women. Its author, state Sen. Hannah-Beth Jackson, pointed to recent anecdotal evidence showing that the law is having an effect.
"We’ve been seeing women asking their co-workers and their colleagues about what they’re paid because you can’t contest what you don’t know,” the Santa Barbara Democrat said. “Employers are now being forced to take a look at their practices in order to comply."
On average, women made 80 cents for every dollar a man made in 2015, according to data released Tuesday by the U.S. Census Bureau.
In California, the gap is narrower. Last year, women in the state made 86% of what men made on average, according to an analysis of census data by the advocacy group the American Assn. of University Women.
State and federal laws already banned discriminating against women by paying them less, but the Fair Pay Act strengthened existing protections. It puts the burden of proof on employers and explicitly bans retaliation against employees who discuss their salaries, Jackson said.
It also bars employers from paying women less for “substantially similar” work. Before, courts interpreted the law to mean an employee had to have the same job as a male counterpart.
“It was so limiting and it gave courts and judges an easy way out,” said Lori Costanzo, an attorney who worked on a recent pay equality lawsuit against Los Angeles-based Farmers Insurance. “But now it’s a little more discretionary so it gives us more room to argue."
In the Farmers Insurance lawsuit, nearly 300 female attorneys said the company violated federal and state anti-discrimination laws by paying them less than their male counterparts. The suit was settled this year for $4 million and a commitment by the company to pay women more. It didn’t rely on the California law, but Costanzo said it may have had an indirect impact.
Costanzo said the “substantially similar” provision of the law could apply to women in the Farmers suit. Although some of the women weren’t involved in arguing cases at trial like their male colleagues, they performed similar work researching and writing behind the scenes.
The new law makes it easier to compare women and men in such roles, she said.
“I’m much more likely to take on cases now that maybe before were kind of on the edge, if the woman wasn’t doing the exact same work as the man,” Costanzo said.
After Brown signed the Fair Pay Act last year, San Francisco business-development firm Salesforce announced it had spent $3 million to fix the wage gap between its male and female employees. Jackson pointed to the Salesforce audit, as well as similar efforts announced by more than a dozen other large companies headquartered in California, as evidence the law is prompting employers to comply.
Rachael Langston, an attorney with the Legal Aid Society-Employment Law Center in San Francisco, said she’s received an uptick in calls about pay issues since the law took effect. But she said laws alone won’t solve the problem.
“The act is a really good and strong step in that direction,” Langston said. “But it's going to take some time and additional transparency to really see change."
Female employees at the California-based Sedgwick law firm filed a complaint in July alleging the company violated federal and state laws, including the California Fair Pay Act, by paying them less than their male counterparts.
Sharon Vinick, an attorney representing the women in the lawsuit, said that although the complaint cites the new California law, it’s too early to measure the effect the law will have, on that case or more generally.
Even so, lawmakers pushed this year to expand the law. AB 1676 by Assemblywoman Nora Campos (D-San Jose) would add prior salary to the list of reasons that cannot be used to pay women less than men. SB 1063 by state Sen. Isadore Hall III (D-Compton) would apply language about “substantially similar work” that Jackson used to strengthen gender-based protections to wage discrimination based on race or ethnicity.
Both bills are on Brown’s desk. He has until the end of the month to decide whether to sign them into law.
Opponents say it’s too soon to expand protections before they’ve seen what effect the Fair Pay Act will have, said Jennifer Barrera, a lawyer with the California Chamber of Commerce. The Chamber supported the Fair Pay Act, but opposed early versions of both bills passed this year.
Earlier this year, the state convened a task force of lawyers, policy experts and others to develop guidance for employers to follow the law. Barrera sits on the task force and said the state should at least wait until it releases some advice for employers before enacting SB 1063.
“The bill from our perspective would have subjected employers to frivolous litigation,” she said. “Before you expand [the Fair Pay Act], at least let’s provide some guidance to employers.”
Jackson said both Hall’s and Campos’ bills are important efforts in the fight to close the pay gap.
Lawmakers who championed the bills have pointed to data that show the wage gap widens for women of color. And they say women shouldn’t be penalized for prior salaries that may have been artificially low due to discrimination.
Often employers aren’t consciously trying to pay women less, said Jennifer Reisch, legal director for the San Francisco group Equal Rights Advocates. Reisch attributes much of the wage gap to “built-in headwinds for women in the workplace,” such as unconscious bias against women who become mothers.
“There’s still a lot of fear out there, still a lot of taboo about talking about pay,” Reisch said. “It’s very difficult for a single person acting all by herself to discover that she’s being paid less and do something about it.”