Hunton Employment & Labor Perspectives

California was one of the leading states to tackle pay discrimination by banning inquiries into salary history.  California Labor Code Section 432.3, which went into effect on January 1, 2018, prohibits public and private employers from seeking or relying upon the salary history of applicants for employment.  But some of the law’s terms were undefined and some of the provisions were unclear, so after Section 432.3 went into effect, employers had questions about how to remain compliant with the law when hiring new employees.

The new year brings new laws for California employers to grapple with. Below we highlight the most significant new employment laws affecting California employers as of January 1, 2018.  Companies based in California or with operations in California are encouraged to review their policies and procedures in light of these developments.

When it comes to employee wage equality, California already has one of the most expansive laws in the country, and it is now attempting to go even further. On June 23, the Wage Equality Act of 2016 (“Wage Equality Act”), SB 1063, took one step closer to becoming law as it passed the California State Assembly’s Committee on Labor and Employment. The bill seeks to extend the protections of the California Fair Pay Act, which prohibits pay disparity based on sex for substantially similar work, to also prohibit such disparities based on race or ethnicity. Already approved by the State Senate on May 31, 2016, the Wage Equality Act will now be heard in the Assembly’s Appropriations Committee in August after which, assuming it passes, it will make its way to the Assembly floor. If California’s Wage Equality Act is enacted, it will likely create the strongest wage equality law in the United States.

In late August, California legislators advanced Senate Bill 358 which aimed to further close gender pay gaps in California.  Considered one of the strongest proposed equal pay laws in the nation, Governor Brown indicated he would support SB 358, known as the California Fair Pay Act.  The bill was presented to Governor Brown for signing in early September.  Over a month after SB 358 was placed onto Governor Brown’s desk, on October 6, 2015, Governor Brown signed the bill into law.  The SB 358 amends Section 1197.5 of the California Labor Code and requires that an employer “not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” For an in-depth discussion of the California Fair Pay Act’s provisions, please visit Hunton & Williams LLP’s previous blog post.

California Governor Jerry Brown indicated in late August that he intends to sign into law a California Senate Bill aimed at further closing gender pay gaps in California. On August 31, 2015, the California State Senate unanimously passed the bill which aims to eliminate gender wage gaps in California by amending the California Equal Pay Act to prohibit employers from compensating employees at wage rates less than rates paid to employees of the opposite sex for “substantially similar” work. Governor Brown was presented with Senate Bill 358 (“SB 358”) in early September, and it is anticipated he will sign it soon.