California’s payment laws you should know. California is regulated by several pay equity and transparency laws. Employers face several regulations under California Federal law, here is a summary of three very important equal pay laws California employers must understand:
- Right for employees to discuss payment
Employees have the right to discuss their wages and workplace environment. Employers can’t prohibit employees from discussing their wages or require that an employee refrains from discussing information about their employer’s working conditions.
2. Employers cannot ask applicants about their prior salary
Labor Code section 432.3 prohibits California employers from relying on an applicant’s salary history information to determine the pay offer to the applicant. This was effective on January 1, 2018. This law applies to all employers regardless of their size. The salary history information includes compensation and benefits. In addition, an employer must provide the “pay scale” for the position to an applicant. An employer may ask a candidate about their salary expectations.
3. Californias Fair Pay Act
California’s Fair Pay Act, Labor Code section 1197.5, was created to ensure equal payment across genders and races. This law was effective on January 1, 2016, this law expands employees’ protection who do “substantially similar” work. Employers can justify different pay based on:
- A seniority system
- A merit system
- A system that measures earnings by quantity or quality of production
- A bonafide factor other than sex, such as education, training, or experience.
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