As of January 1, 2023, employers with 15 or more employees must include the pay scale, which is the salary or hourly wage range that the employer reasonably expects to pay for the position, in job postings. All employers must provide the pay scale to current employees who request the information for their position.
Employees who become aware of a pay disparity may seek to make claims under the California Equal Pay statute, Labor Code Section 1197.5. Equal Pay claims do not require a showing of discriminatory intent. Unintentional disparities may expose an employer to liability if the employer cannot demonstrate legitimate business reasons for the gap (which cannot include prior salary history).
Equal pay claims have high damages exposure due to the remedy of double damages for back-pay, interest on the unpaid wages and attorneys fees. There is also the risk that an employee who discovers a pay disparity may pursue an action for gender or race discrimination. To succeed on such a claim, the employee must show the disparity was created due to discriminatory reasons. Defending equal pay or related discrimination actions is costly but avoidable.
Employers can proactively audit, document and correct pay where necessary. They can regularly review pay practices for pay disparities not justified by documented differences in skill, experience, responsibilities or other legitimate business reasons. Employers may also revisit prior pay decisions and regularly schedule audits to prepare for pay scale disclosures, government reporting or any future investigation or claim.
About Tressler’s Wage & Audit Services
Tressler regularly guides employers through the maze of legal requirements for wages, hours of work and pay practices. We spend the majority of our time litigating and counseling in this highly specialized and regulated area. Tressler attorneys have the knowledge and experience necessary to collaborate with our clients to develop assessments specifically tailored to their needs, and the practical bent to develop solutions compatible with our clients’ business goals. Our attorneys are adept at analyzing questions under federal and state laws on topics such as exempt and independent contractor classification, overtime requirements and calculation, tipped employee issues, meal and rest breaks, compensability of pre-shift and post-shift activities and training time.
Kristin Webb is senior counsel in Tressler’s Labor & Employment Practice Group. She focuses her practice on defending employers and providing advice and counsel against claims, including wage and hour, discrimination, harassment, retaliation, wrongful termination, breach of contract and privacy.