Developments in Equal Pay Litigation

2 | Developments in Equal Pay Litigation © 2021 Seyfarth Shaw LLP B. State Equal Pay Legislation Equal pay has been an important issue at the statewide level as well, with numerous states amending their equal pay laws to supplement the federal EPA. California, New York, and Massachusetts were the first states to adopt more onerous pay equity laws in the last few years. 5 Other states soon followed. State equal pay laws differ from the federal EPA in significant ways. For example, on January 1, 2016, the California Fair Pay Act, 6 became effective for all employers with California-based employees. It expands upon the protections offered by the federal EPA and Title VII, as well as already-existing California law. Importantly, the California Fair Pay Act allows employees to be compared even if they do not work at the same establishment. 7 This means that an employee’s pay may be compared to the pay of other employees who work hundreds of miles away. By comparison, New York’s equal pay law also allows employees to be compared even if they do not work at the same establishment, but those comparators must work in the same “geographic region” no larger than the same county. 8 Unlike the federal EPA, which requires plaintiffs to establish that they performed “equal work” as a comparator of the opposite sex, the California law requires only a showing that employees are engaged in “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” 9 The Massachusetts Equal Pay Act prohibits differences in pay for “comparable work.” 10 Other states apply different standards for comparing the work between a plaintiff and his or her alleged comparators. State laws also differ with respect to the affirmative defenses available to defendants. For example, the California law requires employers to affirmatively demonstrate that any pay differences are based on one or more of a limited number of factors. It also limits the factors that employers can use to justify pay differentials and requires that the factors be applied reasonably and, when viewed together, must explain the entire amount of the pay differential. 11 The Massachusetts law also creates an affirmative defense for an employer that has: (1) completed a self-evaluation of its pay practices that is “reasonable in detail and scope in light of the size of the employer” within the three years prior to commencement of the action; and (2) made “reasonable progress” toward eliminating pay differentials uncovered by the evaluation. State laws also differ in terms of the procedural rights and remedies available to plaintiffs and defendants. For example, the California Fair Pay Act allows employees to bring an action directly in court without first exhausting administrative remedies – provided the employee does so within two years (or three if the violation was “willful”) – and the employee may recover the balance of wages, interest, liquidated damages, costs, and reasonable attorney’s fees . 12 The California law also extends – from two years to three – an employer’s obligation to maintain records of wages and pay rates, job classifications, and other terms of employment. 13 Under the California Fair Pay Act, employers may not prohibit employees from disclosing or discussing their own wages or the wages of others, or from aiding or encouraging other employees to exercise their rights under the law . 14 The New York law includes a similar provision. These anti-pay secrecy requirements echo similar prohibitions under the National Labor Relations Act, the California Labor Code, and an Executive Order that applies to federal contractors. 5 2017 Cal. Legis. Serv. Ch. 688 (A.B. 168) (West); N.Y. Lab. Law § 194 (McKinney); Mass. Gen. Laws Ann. ch. 149, § 105A (West). 6 Cal. Lab. Code § 1197.5. 7 See Cal. Lab. Code § 1197.5. The California Fair Pay Act expressly removed from the preexisting California pay law statutory exemptions that applied where work was performed “at different geographic locations” and “on different shifts or at different times of day.” 8 NY Lab. Law §§ 194, et seq . 9 Cal. Lab. Code § 1197.5(b). 10 Mass. Gen. Laws. c. 149 § 105A. 11 Id. 12 Cal. Lab. Code § 1197.5(h), (i). 13 Id. § 1197.5(e). 14 Id. § 1197.5(k)(1).