I. California
On Tuesday, October 6, 2015, California’s Governor Jerry Brown signed the Fair Pay Act into law, taking effect January 1, 2016. The Fair Pay Act amends California Labor Code (“CLC“) section 1197.5, and closes, what proponents have called, a loop-hole in the 66 year-old California Equal Pay Act.

Under the umbrella that sex-based differences are not grounds for disparate pay: This law will negatively affect businesses that (i) do not provide gender equal pay for substantially similar work, and (ii) cannot show the disparate pay is reasonable and based on either (a) length of employment (seniority) or (b) worker quality (merit, quantity/quality of product, education, training, experience). Employers must maintain records for 3-years of “wages and wage rates, job classifications, and other terms and conditions of employment of the persons employed by the employer”.

Framed in many media outlets as a progressive-leftist versus conservative-right issue, from our Michigan lawyer perspective this stop-gap law is following the intent and trends of the California legislature. California’s legislature intended to engage and eliminate disparate wages in prior legislation, but it appears as though the true intent was bypassed. This new piece of legislation seems to do a more effective job in executing its original intent. The legislature follows the democratic-majority of California’s people, with mindful respect of the democratic-minority.

II. Michigan
Michigan, like many other states, allow disparate wage claims to be made against employers for civil rights violations of certain protected persons. Alternatively, the Equal Pay Act amendment to the Fair Labor Standards Act, prohibits an employer from compensating an employee of one sex at a rate that is below what it pays another employee of the opposite sex “for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.” (29 USC 206)

III. National Conclusion
In light of this California amendment, debates we see in Michigan, and rhetoric in Washington, race, gender, and objective equal pay legislation is coming. Generally, though not always, legislation is passed to address an issue the democratic-majority believes is a problem. In present day America, all other factors being the same, nearly every person who is not a white-man earns less per dollar.

We are advising employers to get out in front of these laws, keep fair documents and records, define job duties, properly categorize employees, form a pay scale, create an objectively neutral merit system, and where all other things are the same pay the same. The dollars saved through paying any employee less, for a substantially similar job, is not worth the risk of losing lawsuit, the harm to public image, and certainly not worth the cost of paying a lawyer to defend frivolous allegations of perceived discrimination. Avoiding this today, could save millions in the future.

At the writing of this article, Zamzow PLLC does not employ California attorneys, interpretation of this California law is through the lens of licensed Michigan lawyers.