Discrimination

Expansion of the California Equal Pay Act

Expansion of the California Equal Pay Act

In 2017 California enacted several amendments to Labor Code section 1197.5, which resulted in significant expansion of the California Equal Pay Act. While the old law prohibited wage disparity between employees of the opposite sex, under the new law, the protections have been expanded to prevent a wage disparity between employees who are of a different race or ethnicity.

In deciding to expand the protections of Equal Pay Act, the California legislature found that the gender wage gap in California remained steady, with women earning only 84 cents on the dollar compared to men. However, for minority women the disparity is even more substantial, with African American women in California making just 63 cents and Hispanic women less than 43 cents for every dollar earned by white non-Hispanic men.

Due to the history of women receiving lesser pay than men for the same jobs, under the new law, an employee’s prior salary history can no longer be used as justification for a wage disparity.

Exceptions to the California Equal Pay Act

As with prior versions of the law, there are exceptions. The prohibitions against wage disparity apply to employees who are doing substantially similar work, when considering skill, effort, and responsibility, and when performed under similar working conditions. An employer will not be in violation of the law when a wage differential is based on one or more of the following legitimate factors:

  • A seniority system.
  • A merit system.
  • A system that measures earnings by quantity or quality of production.
  • A bona fide factor other than sex, race or ethnicity, such as education, training, or experience relevant to the job position and the needs of the business.

An employer is also required to demonstrate that factors relied upon were applied reasonably and account for the entire wage differential. In other words, the employer must prove that any wage disparity is entirely unrelated to an employee’s gender, race or ethnicity.

An employee who was the victim of wage discrimination in violation of the equal pay laws is entitled to recover twice the wages he or she lost due to the employer’s discrimination, plus interest and attorney’s fees.

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Employment Law Updates

The Healthy Workplaces Healthy Families Act 2014

The Healthy Workplaces Healthy Families Act of 2014 went into effect on July 1, 2015. Under the new law, California employers are now required to provide paid sick days to certain employees.  Paid sick time accrues at a minimum rate of one hour of paid sick time for every 30 hours worked. Employees are entitled to use accrued sick days beginning on the 90th day of employment. Accrued paid sick days will carry over to the following year of employment.

No Retaliation for Accommodation Request

On July 16, 2015, California enacted Assembly Bill No. 987, making it unlawful for an employer to retaliate or otherwise discriminate against an employee for “requesting” accommodation for a physical or mental disability or religious belief or observance, regardless of whether the accommodation was granted. The new law clarifies that a request for reasonable accommodation based on religion or disability constitutes protected activity under Government Code Section 12940 of the Fair Employment and Housing Act. An employee may not be subject to relation for making such a request.

California Cheerleaders are Employees

On July 15, 2015, California passed a new law adding section 2754 to the California Labor Code. Under the new law, cheerleaders working for California professional sports teams must now be classified as employees, and are  protected by existing State and Federal employment laws, including minimum wage and overtime laws and anti-discrimination and harassment statutes.

 

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California Says Cheerleaders are Employees

California recently enacted a new law requiring all California professional baseball, basketball, football, ice hockey, or soccer teams to classify cheerleaders as employees and not independent contractors. 

Existing California and Federal employment laws prescribe comprehensive requirements relating to minimum wages, overtime compensation and standards for working conditions applicable to an employment relationship. Existing laws require employers to make specified payments and withholdings from wages and provide detailed wage statements to employees reflecting all payments and deductions. Existing laws also provide protection to employees for, among other things, discrimination, harassment and retaliation.

Under this new California law, California cheerleaders are now protected by the existing State and Federal laws governing the employment relationship, including payment of minimum wage, overtime compensation, standards for working conditions and prohibitions against discrimination, harassment and retaliation.

California Governor Jerry Brown signed Assembly Bill No. 202, enacting California’s new cheerleader law on July 15, 2015. The cheerleader law will be added as Section 2754 to the California Labor Code.

 
Assembly Bill No. 202 (PDF)

California Legislative Information

Text of Labor Code Section 2754:

(a) For the purposes of this section, the following definitions shall apply:

(1) “California-based team” means a team that plays a majority of its home games in California.

(2) “Cheerleader” means an individual who performs acrobatics, dance, or gymnastics exercises on a recurring basis. This term shall not include an individual who is not otherwise affiliated with a California-based professional sports team and is utilized during its exhibitions, events, or games no more than one time in a calendar year.

(3) “Professional sports team” means a team at either a minor or major league level in the sport of baseball, basketball, football, ice hockey, or soccer

(b) Notwithstanding any other law, for purposes of all of the provisions of state law that govern employment, including this code, the Unemployment Insurance Code, and the California Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3 of Title 2 of the Government Code), a cheerleader who is utilized by a California-based professional sports team directly or through a labor contractor during its exhibitions, events, or games, shall be deemed to be an employee.

(c) The professional sports team shall ensure that the cheerleader is classified as an employee.

 

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Supreme Court rules against Abercrombie

The United States Supreme Court rules against Abercrombie & Fitch in a case of religious discrimination. 

Abercrombie & Fitch Stores, Inc., operates several lines of clothing stores, each with its own “style.” Consistent with the image Abercrombie seeks to project for each store, the company imposes a Look Policy that governs its employees’ dress. Abercrombie’s Look Policy prohibits employees from wearing “caps” as too informal for Abercrombie’s desired image. Samantha Elauf is a practicing Muslim woman who wears a headscarf consistent with her religious obligations. Elauf applied for a position in an Abercrombie store, and was interviewed by the store’s assistant manager. Based on Abercrombie’s ordinary system for evaluating applicants, Elauf received a rating that qualified her to be hired. However, Abercrombie decided not to hire Elauf because her headscarf conflicted with Abercrombie’s employee dress policy.

The Equal Employment Opportunity Commission (EEOC) filed a lawsuit suit on Elauf’s behalf for religious discrimination in violation of Title VII of the Civil Rights Act of 1964.The Supreme Court ruled in favor of Elauf holding that the Civil Rights Act prohibits a prospective employer from refusing to hire an applicant in order to avoid accommodating a religious practice that it could accommodate without undue hardship.

The Court concluded that an employer may not make an applicant’s religious practice a fac­tor in employment decisions. To prevail on such a claim, an applicant must show only that his or her need for an accommodation was a motivating fac­tor in the employer’s decision. This applies regardless of whether the employer had knowledge of the prospective employee’s need for an accommodation. 

Elauf was awarded $20,000 in damages at trial. 

EEOC v. Abercrombie & Fitch Stores, Inc. (US 14–86 6/1/15)

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Court upholds $60,000 award to victim of sexual harassment wrongful termination

Sexual harassment Wrongful termination

Plaintiff Esther Kim was hired in 2006 to work as an account manager, processing phone and email orders for defendant, Konad USA Distribution, Inc. From 2007 to 2010 Kim was subjected to numerous incidents of sexual harassment by her boss Dong Whang. Kim was terminated in 2010.  Following her termination, Kim filed a lawsuit against her employer for, among other things, sexual harassment and wrongful termination.

Following trial, the court awarded plaintiff Esther Kim $60,000 in damages against her former employer and her former boss for her claims of sexual harassment and wrongful termination. Defendants appealed the award of damages, however, the California Court of Appeals upheld the award of $60,000 to Ms. Kim.

Kim v. Konad USA Distribution, Inc.

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Summary of California's Equal Pay Act

An Employee’s Right to Equal Pay

California and Federal laws generally prohibit an employer from paying its employees less than the rates paid to employees of the opposite sex. This applies when the employees’ jobs require substantially similar work, when considering their skill, effort, and responsibility, and are performed under similar working conditions. (Cal. Labor Code section 1197.5.) As an example, an employer would not be permitted to pay a female secretary less than a male secretary working in the same office and performing the same job duties. To do so would violate the equal pay laws.

Exceptions to the Equal Pay Rule

While prohibiting wage discrimination, the equal pay laws, do not prevent employers from compensating employees of the opposite sex differently for legitimate reasons, including based on a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or another system based on any bona fide factor other than sex, such as education, training, or experience. In other words, an employer can still reward its employees for good work performance without violating the equal pay laws. To qualify for an exception, it is the employer’s burden to prove that a wage disparity is based on a legitimate reason entirely unrelated to the sex of the respective employees.

Prohibition against Retaliation by Employer

Under California law, an employer is prohibited from retaliating or discriminating against an employee in any way for enforcing his or her rights under the equal pay laws. An employer also cannot prevent an employee from disclosing his or her own wages, discussing the wages of other employees, inquiring about the wages of other employees, or assisting or encouraging other employees to exercise their rights under the equal pay laws.

An Employee’s Remedies for Wage Discrimination

Wage discrimination is viewed as a very serious matter in California, which is reflected in the remedies available to an aggrieved employee. An employee who was the victim of wage discrimination in violation of the equal pay laws is entitled to recover the wages he or she lost due to the discrimination, plus interest. The employee is also entitled to recover an additional equal amount from the employer as liquidated damages. For example, this means that an employee who was deprived of $15,000 in wages due to his or her employer’s violation of the equal pay laws would be entitled to recover the unpaid $15,000 with interest, plus an additional $15,000 with interest, for a total recovery in excess of $30,000. In the event a law suit is necessary to recover these damages, an employee may also be entitled to an award of attorney’s fees. An employee who was subjected to retaliation for enforcing the right to equal pay may also be entitled to reinstatement and reimbursement for lost wages and work benefits resulting from the retaliation.

Conclusion

Wage discrimination is a serious matter that should not be overlooked by California employers or employees. California employers should be cognizant of the applicable laws when setting a pay scale for its employees. Similarly, California employees should be aware of their rights to equal pay and when those rights have been violated. When in doubt, it is important to consult with an experienced employment attorney.

Additional Resources:

California Labor Code

California Division of Labor Standards Enforcement (DLSE)

California Department of Fair Employment and Housing

Wage Discrimination

 

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