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32 April 2016 • www.CPAPracticeAdvisor.com A YEAR IN THE LIFE: PAYROLL ACCOUNTANT "Si x t y-si x years af ter passage of the California Equal Pay Act, many women still earn less money than men doing the same or similar work," said Gov. Edmund G. Brown Jr., when he signed the legislation into law. "Tis bill is another step toward closing the persistent wage gap between men and women." A lthough federal anti-discrimi- nation laws have long required that women and men are paid equally for the same work, the new law in California not only expands what may constitute a similar job, but also places the burden of demonstrating that any diferences in pay for similar jobs are based on legitimate factors other than gender, such as education or experience, on the employer. California now has one of the strictest laws in the country, and other states have recently passed equal pay laws or are considering them. Tese new laws could leave more employers open to lawsuits and claims of discrimination. In order to stay compliant, employers should take some time to understand the diferent laws that could impact them, review their pay scales, and make sure any pay diferences can be justifed by legitimate business reasons. State and Federal Laws Te new California law puts a greater burden on employers to prove that they have not discriminated against employees with their pay practices. Previously, California employees had to prove that they were not being paid at the same rate as someone of the opposite gender at the "same estab- lishment" for "equal work." Now, the phrase "same establishment" has been eliminated from the law, and "equal work " has been changed to "substantially similar work." In order to avoid discrimination claims, California employers now have to prove that any pay difer- ences are based on any or all of four factors: • A seniority system; • A merit system; • A system that measures earnings by quality or quantity of production; or • A bona fde factor other than sex, such as education, training, or experience. Te California law also prohibits companies from banning employees from disclosing their own wages, asking colleagues about their wages, or talking about how much others are paid. A long w ith California, other states have been streng thening their equal pay laws as well. Last year, New York passed the "Achieve Pay Equity" law, which is similar to California's. In 2015, Connecticut passed a law that makes it illegal for employers to ban employees from revealing their ow n compensa- tion or ask ing colleag ues about their salar y. Under Delaware law, state contractors must pay female employees equally. Other states that have recently considered equal pay legislation include Washington and Massachusets. Employers can also face pay discrimination claims under federal laws such as the Equal Pay Act of 1963, Title V II of the Civil R ights Act of 1964, the Age Discrimina- tion in Employment Act of 1967 ("A DEA"), the Lilly Ledbeter Fair Pay Act of 2009, and Title I of the A mericans w ith Disabilities Act of 1990 ("A DA"). "Te law against c ompen s at ion d i sc r i m i n at ion includes all payments made to or on behalf of employees as remuneration for employment," according to the U.S. Equal Employ ment Oppor- tunity Commission. "A ll forms of compensation are covered, including salary, overtime pay, bonuses, stock options, proft sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefts." Equal Pay Act According to the EEOC, Te Equal Pay Act ("EPA") requires that men and women be paid equally for equal work in the same establishment. W hile the jobs do not need to be identical, they must be substantially equal. "It is job content, not job titles, that determines whether jobs are substantially equal," according to the EEOC. "Specifcally, the EPA provides that employers may not pay unequal wages to men and women who perform jobs that require substantially equal sk ill, efort and responsibility, and that are performed under similar work- ing conditions w ithin the same establishment." Title VII, ADEA, and ADA Title V II, the A DEA, and the A DA prohibit compensation discrimina- tion on the basis of race, color, religion, sex, sex ual orientation, national origin, age, or disability. Tese laws difer from the EPA because there is no requirement that anyone claiming pay discrimination have a job that is "substantially equal" to a higher-paid person out- side the protected class. According to the EEOC, it is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on compensation or for fling a discrimination charge, testifying or participating in any way in an investigation, proceeding, or litigation under these laws. Equal Pay Becomes More Complicated for Employers By Richard D. Alaniz W hen California's Fair Pay Act took efect on Jan. 1, it rep- resented one of the toughest equal pay laws in the nation. Te law, which strengthened the state's Equal Pay Act, represents the latest legislative change causing issues and concerns for employers throughout the United States. Richard D. Alaniz is senior partner at Alaniz Schraeder Linker Farris Mayes, L.L.P., a national labor and employment frm based in Houston. He has been at the forefont of labor and employment law for over thirty years, including stints with the U.S. Department of Labor and the National Labor Relations Board. Rick is a prolifc writer on labor and employment law and conducts fequent seminars to client companies and trade associations across the country. Questions about this article, or requests to subscribe to receive Rick's monthly articles, can be addressed to Rick at (281) 833-2200 or ralaniz@alaniz-schraeder.com . CONTINUED ONLINE AT: www.CPAPracticeAdvisor. com/12191493