Equal Pay and Promotion in California: What You Need to Know
November 19, 2024
By Helen Halldorsson, Esq. & Marcelo Lopez
The U.S. Census Bureau’s 2016 Current Population Survey revealed that Black women working full time received 63 cents for every 1 dollar paid to White men. This resulted in annual losses of $21,001 for Black women in 2016 alone [1]. Five years later, the state of California still contends with racial pay differences. On September 30, 2020, California passed Senate Bill 973 in an effort to address the issue. The bill enforces significant pay reporting requirements on “large” California employers – defined as those with 100 or more employees. These companies must submit data annually to the Department of Fair Employment and Housing (DFEH) regarding their employees’ pay [2]. The data is organized by gender, race, and ethnicity, allowing the DFEH to identify wage patterns and more effectively enforce equal pay and anti-discrimination laws [3]. While California is making noble efforts to combat racial pay gaps, there is still much work to be done. Racial pay gaps continue to impact modern workplaces by limiting career advancement opportunities for some minority workers. High-profile cases such as Stewart v. Kaiser and Cuenca v. Kaiser illustrate this. These cases reveal alarming statistics and signal to employers the need to commit to providing fair working environments for all.
In April 2021, prominent healthcare company Kaiser Permanente settled two class-action lawsuits concerning unequal pay. The first, on behalf of Black employees for $11.5 million and the other, on behalf of Latino employees for $7.4 million [4]. In Stewart v. Kaiser, plaintiffs alleged that Kaiser Permanente paid Black employees less than non-Black employees for doing similar work and failed to promote Black employees, compared to non-Black employees, despite similar performance reviews [5]. The case was filed in San Francisco County Superior Court by four current and former Black employees on behalf of 2,225 workers in administrative support and consulting services [6]. The second case, Cuenca v. Kaiser, was filed in Alameda County Superior Court by a Latino employee on behalf of approximately 2,500 others in administrative support, consulting services, and similar positions. The complaint alleged that Kaiser paid Latino workers less than White workers and discriminated in hiring. This resulted in Latino employees disproportionately working in the lowest-paying jobs and being underrepresented in management [7]. Kaiser settled both lawsuits, which in total, covered about 4,800 current and former Black and Latino employees. As part of the settlements, Kaiser agreed to implement a host of programs to create more opportunities and provide career development for Black and Latino employees.
Cases like these exemplify the need for large, California-based employers to remain committed to their missions of providing fair working environments for all. While the California Equal Pay Act has existed for over 70 years, race and ethnicity were not formally added as protected categories until 2017. Many women and people of color remain disenfranchised when it comes to equal pay. If you suspect your equal pay rights have been violated and are considering your legal options, consult with a seasoned employment attorney at Valerian Law, P.C.
[1] Carmina. New Bill in California Will Help Abolish Gender Pay Gaps and Racial Pay Disparities (May 11, 2021). Retrieved December 21, 2021, from https://factorialhr.com/blog/gender-racial-pay-gap/#4.
[2] Employers with 100 or more employees are required to file an EEO-1 and must file a report with the DFEH. California SB 973 – Agency Update (December 4, 2020). Retrieved December 21, 2021, from https://www.paylocity.com/resources/resource-library/alert/compliance-alert-california-sb-973-agency-update/.
[3]DFEH. California Pay Data Reporting (2021). Retrieved December 22, 2021, from https://www.dfeh.ca.gov/paydatareporting/.
[4] Stewart, et al. v. Kaiser Foundation Health Plan, Inc., et al. Filed April 22, 2021 in the Superior Court of San Francisco. Cuenca v. Kaiser Permanente. Filed June 17, 2020 in the Superior Court of Alameda County.
[5] Moench, Mallory. Kaiser to pay $18.9 million to settle pay equity lawsuits by Black and Latino staff (April 22, 2021). Retrieved December 22, 2021, from https://www.sfchronicle.com/local/article/Kaiser-to-pay-11-5-million-to-settle-pay-equity-16121671.php.
[6] Ibid.
[7] Ibid.