Another year and another round of legislative updates. California’s Legislature continues to provide a rich source of law. This year the highlights include equal pay legislation, expanded Labor Commissioner authority, complicated piece-rate compensation requirements, additional protections for whistleblowers and protected classes for discrimination, and an attempt to stem at least some of the onslaught of “nonsubstantive/technical violation” Private Attorney General Act of 2004 (PAGA) lawsuits. All newly enacted laws are effective Jan. 1, 2016, unless otherwise stated.

Bills Signed Into Law -

SB 358 – Gender Wage Differential: SB 358, the “Fair Pay Act” is one of the most notable bills of 2015. SB 358 expands existing law, California Labor Code Section 1197.5, which prohibits an employer from paying an employee wages less than the rates paid to the opposite sex within the same establishment for equal work. SB 358 eliminates the requirement that the wage differential be within the same “establishment” and changes the standard from “equal work” to “substantially similar work.” Under SB 358, to determine if an employee is performing “substantially similar work,” a court will consider the “composite of skill, effort and responsibility, and performed under similar working conditions.” In addition, SB 358 increases and shifts the burden to employers to defend a wage discrimination claim by requiring that the employer demonstrate that wage differential is not based on or derived from a sex-based differential in compensation, is related to the job at issue, and is consistent with business necessity. The employer must demonstrate that each of these factors is “applied reasonably,” and that one or more relied-upon factors is the cause of the pay difference. The bill also contains anti-retaliation provisions and provides a private right of action to enforce its provisions. SB 358 also increases the record-keeping requirements for wage-related information and other terms and conditions of employment from two years to three years. Employers should consider auditing their pay practices to determine whether a pay differential exists and ensure that they document decisions related to pay, performance and promotions.

Originally published in Law360, New York on December 3, 2015.