Pay Equity Extends to Race, Ethnicity, Without Banning Salary Inquiries

Recent state pay equity initiatives (in Massachusetts, New Jersey, New York) have focused on gender. California is different. Leave it to the state that last year passed the nation’s strictest pay equity law as to gender to take it up another notch.  SB 1063, dubbed the “Wage Equality Act of 2016,” extends last year’s Fair Pay Act amendments to Labor Code section 1197.5 to cover unequal pay as to race and ethnicity. Thus, effective January 1, 2017, California employers must not pay employees a wage rate less than the rate paid to employees of a different race or ethnicity for substantially similar work. (Read our prior alert for a description of the Act’s requirements and prohibitions.) Meanwhile, newly enacted AB 1676 will prohibit employers from using an employee’s prior salary as the sole basis to justify a pay disparity. In the process, however, California has declined to follow the Massachusetts example of forbidding employer inquiries into an applicant’s prior salary.

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