California’s New Equal Pay and Anti-Retaliation Protection Act (SB 497)

California continues to lead the nation in advancing employees’ rights with the introduction of the new Equal Pay and Anti-Retaliation Protection Act, SB 497. This groundbreaking legislation strengthens existing laws to ensure that all employees receive fair compensation regardless of gender, race, or ethnicity. Read on as we delve into the nuances of SB 497, highlighting its significance and the implications for California workplaces. If you are an employer or employee in the Bay Area, contact San Francisco employment law attorney Richard Koss for insight and assistance dealing with legal issues in employment practices.

What Is SB 497?

SB 497 represents a pivotal shift in California’s commitment to equal pay and anti-discrimination in the workplace. Building on the foundation of the California Equal Pay Act, this new legislation introduces stricter requirements for employers to justify pay disparities and expands protections against retaliation for employees who seek to enforce their rights under the law. The Act strengthens protections for employees who inquire about or discuss wages or who aid in the enforcement of the Equal Pay Act, safeguarding them from retaliation by employers.

California Labor Code 1197.5 requires employers to provide equal pay for substantially similar work, irrespective of the job title, when viewed as a composite of skill, effort, and responsibility. It mandates that any pay differentials must be based on legitimate factors such as seniority, merit, or a system that measures earnings by quantity or quality of production.

SB 497 amends 1197.5 to add a rebuttable presumption that any adverse employment action taken within 90 days of engaging in protected conduct is presumed to be an unlawful act of retaliation. Prior to SB 497, the employee makes a prima facie case of retaliation by showing protected conduct, adverse action and a causal connection between the two. The burden then shifts to the employer to rebut the presumption by showing a lawful reason for the action, shifting the burden back to the employee to prove the employer’s reason was a pretext for retaliation or otherwise not genuine.

With SB 497, an employee’s prima facie case is made simply by showing an adverse action in that 90-day period. This rebuttable presumption makes it easier for an employee to state a claim and shifts the burden to the employer to prove they didn’t retaliate. Violation of the Equal Pay Act can result in a civil penalty of up to $10,000 per employee per violation awarded to the employee along with other remedies. These remedies are expanded under SB 497.

In addition to enhanced equal pay protections, the law also provides increased transparency regarding pay. Employers are now required to maintain records of job titles and wage rates for three years, promoting transparency and facilitating the enforcement of equal pay laws.

Impact on Employers

For employers in the San Francisco Bay Area and throughout California, SB 497 necessitates a comprehensive review of existing pay practices. Employers must ensure their compensation structures are defensible under the new criteria and that they are prepared to substantiate pay differences with clear, objective criteria. Proactive steps should include conducting internal audits of pay practices and updating policies to ensure compliance with the enhanced transparency and record-keeping requirements.

To position themselves against the presumption of retaliation under the new 90-day window, employers might want to consider instituting a progressive discipline policy as a best practice and document any form of punishment and the reasons therefore. A written and disseminated policy against retaliation might also be prudent as well.

What This Means for Employees

Employees stand to benefit significantly from the protections and provisions of SB 497. The Act empowers workers to challenge discriminatory pay practices and seek recourse without fear of retaliation. It encourages an open dialogue about wages and ensures that all employees have the tools to advocate for fair compensation.

Navigating SB 497 with Richard Koss

Understanding and implementing the provisions of SB 497 can be complex for both employers and employees. Richard Koss, with his extensive experience in California employment law, is well-equipped to guide clients through the intricacies of this new legislation. Employers can benefit from legal counsel to review and adjust their pay practices, ensuring compliance and mitigating the risk of litigation. Employees who suspect unfair pay discrepancies or retaliation can seek Richard’s expertise to understand their rights and pursue justice.

California’s SB 497 is a significant milestone in the fight for equal pay and workplace equality. It underscores the state’s dedication to ensuring that all employees are compensated fairly and protected from discrimination and retaliation. Whether you are an employer seeking to align your business practices with the new requirements or an employee advocating for your rights, Richard Koss is here to provide the legal support you need to navigate the landscape of employment law in California confidently. Call 650-722-7046 on the San Francisco Peninsula or 925-757-1700 for our East Bay Office to schedule a consultation or get help today.