California Labor Laws for 2016 and Fair Pay Act

Sacramento, CAOf the 807 new California labor laws that went into effect on January 1, 2016, it is likely that the Fair Pay Act will keep labor lawyers busy.

Fair Pay Act (SB 358)

Four important things have changed from the previous law.

1. SB 358 requires equal pay for “substantially similar” and not equal work as it was stipulated previously.
2. The new law extends to different locations run by the same employer/company rather than “the same establishment.”
3. Employers must justify any pay differences between male and female workers doing substantially similar work, rather than the onus falling on employees to prove inequities, which usually meant the worker filing a California labor lawsuit.
4. It is now illegal for employers to bar workers from talking about their pay or their coworkers’ pay if the purpose is to determine wage fairness.

“Sharing salary information can enable employees to uncover wage inequities without fear of recrimination, the bill’s author, Sen. Hannah-Beth Jackson, D-Santa Barbara, told the Sacramento Bee (August 2015). “People have been afraid to ask what their colleagues are making,” she said.

Currently there is a pay disparity of 5 to 8 percent between males and females who perform the same work, despite factors like education, experience and seniority being identical. Women in California earn an average of 84 cents for every dollar earned by men, according to data cited in the legislation.

Labor lawyers agree with Governor Jerry Brown, who signed the bill into law in October 2015, that this new statute is “the strongest equal pay law in the nation.” But will it close the wage gap between men and women who perform substantially similar work?

“Substantially similar” could prove to be a “gray area.” The exceptions that employers can cite to allow for differences in pay include seniority, education, and productivity measures that can be tracked by “quantity or quality of production.”

Here are other important new statutes that are in effect this year.

Minimum wage

California’s minimum wage increased from $9 per hour to $10, which is the highest minimum in the United States. The federal minimum is $7.25 an hour. The new minimum will affect more than 1.2 million Californians who earn minimum wage. White-collar workers must earn more for employers to exempt them from overtime pay. The new threshold is $3,466 a month, up from $3,120.

Back wages

If an employee doesn’t get paid what they are owed, SB 588 allows the California Labor Commissioner to slap a lien on the boss’s property to try and recoup the value of the unpaid wages. This was a slimmed-down version of a prior, unsuccessful bill that was pushed by organized labor but repudiated by business interests - the key difference being that the commissioner, not workers, files the liens.

Grocery jobs

When grocery stores get new owners, AB 359 forbids the firing of grocery store workers for at least 90 days after a new market replaces the one where they worked. During those 90 days, union contracts would be honored. While workers can still be dismissed in that window for performance-related reasons, the labor-backed bill seeks to protect workers from losing their jobs to buyouts or mergers.

Cheerleaders

California-based professional sports teams must classify cheerleaders as employees rather than as independent contractors, with the accompanying wage and hour protections, under AB 202. Assemblywoman Lorena Gonzalez, D-San Diego, who carried the bill, was a Stanford cheerleader.

Wage theft

The California Labor Commissioner under SB 588 and AB 970 now has the power to collect back wages and penalties from bosses who fail to pay minimum wage and overtime, force employees to work off the clock, refuse to offer meal and rest breaks, or make illegal paycheck deductions.

Employers can now be subject to stop-work orders, levies against their bank accounts and liens against their property. Employers, as well as owners, directors or managing agents acting on behalf of an employer, can be subject to criminal and personal liability. Previously, companies could avoid judgments by changing names. Now successor companies will be deemed liable if they engage in substantially the same work.

For a complete list of laws that are in effect in 2016, see the list from the Los Angeles Times.