AB 46 – Clarifies that the Fair Pay Act Applies to Public Employers

Category: Public Agencies
Date: Dec 1, 2017 11:58 AM

Labor Code section 1197.5 prohibits an employer from paying an employee a wage rate less than the rate paid to employees of the opposite sex, or to employees of a different race or ethnicity, who perform substantially similar work under similar working conditions. Nevertheless, wage differentials are permissible where payment is made pursuant to one or more of the following factors: a seniority system, a merit system, a system which measures earnings by quality or quantity of product, or a differential based on a bona fide factor other than sex, race, or ethnicity.

AB 46 clarifies that Labor Code section 1197.5’s prohibition on sex, race, and ethnicity-based wage differentials applies to public employers. It also grants the Division of Labor Standards Enforcement (DLSE) authority to enforce this prohibition against public employers. This means a public employee has two or three years (depending on whether the violation is willful) to file a wage discrimination claim with the DLSE. And because an employee is not required to exhaust administrative remedies before filing in court, the employee may forego the DLSE altogether and file a wage discrimination complaint directly in superior court.

Because most public agencies have a merit or civil service system that sets uniform wage rates across each job classification, AB 46 likely will not have a substantial impact on public employers. Public agencies should, however, examine their current salary practices for non-merit system employees to identify any salary discrepancies based on an employee’s gender, race, or ethnicity for job positions that perform substantially similar work. If such discrepancies are found, the employer should examine whether there are any permissible factors for the wage differential or look to remedy the issue to ensure compliance with this law.

(AB 46 amends Section 1197.5 of the Labor Code.)

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