Around this time last year, Section 1197.5 of the California Labor Code was amended by S.B. 358 in order to “eliminate the gender wage gap in California.” Among other things, the amendment sought to increase wage transparency and made it more difficult for employers to defend against gender-based equal pay claims.

On September 30, 2016, California Gov. Jerry Brown signed S.B. 1063, further expanding the statute to prohibit wage discrimination based on race or ethnicity. The new prohibitions on race and ethnicity discrimination in wages mirror the gender provisions, which were discussed in a previous blog post. For example, race-based wage differentials are exempted (as are gender wage differentials) if they are related to payments based on a seniority system, a merit system, quantity or quality of production, or any bona fide factor other than race.

Employers should note that Gov. Brown also signed A.B. 1676, which specifies that prior salary cannot, by itself, justify any gender disparity in compensation.

S.B. 1063 is codified as Section 1197.5(b) of the California Labor Code, and A.B. 1676 is codified as Section 1197.5(a)(3).

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