By Helen Halldorsson, Esq. & Marcelo Lopez
As of March 2021, women in the United States made 82 cents for every dollar earned by men[1]. The pay gap between men and women has persisted for decades with little improvement in recent years[2]. 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[3]. 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[4]. While California is making noble efforts to combat gender pay gaps, there is still much work to be done. Consider the tech industry, for example. Gender pay gaps persist in tech organizations and oftentimes limit career advancement opportunities for women. High-profile cases such as Ellis v. Google and Jewett v. Oracle illustrate this. These cases reveal alarming statistics and signal to employers the need to continually monitor how they are making decisions affecting employee pay.
On May 27, 2021, in Ellis v. Google[5], a California judge certified a class of nearly 11,000 women formerly employed by Google, who allege that the prominent tech giant engaged in “systemic and pervasive pay and promotion discrimination against its female employees in California, at times paying women thousands of dollars less than male counterparts[6].” This is a groundbreaking case that addresses two noteworthy practices that contribute to the gender pay gap. The first practice is the “under-leveling” of women relative to similarly qualified men at the hiring stage. Under-leveling occurs when an employee is given a job title lower than they may be qualified for, based on their skills and experience[7]. Under-leveling often affects women and can result in lower pay. The second practice is basing an employee’s starting pay on their previous pay. This causes women to continue earning less, even when they switch jobs. By certifying a class, the court allowed the case to continue to trial as a class action.
The second case, Jewett v. Oracle , has also cleared the litigation hurdle of class certification[8]. On April 29, 2020, a California judge certified a class of over 3,000 women employees of Oracle who allege they were systematically underpaid compared to men. According to the testimony of an expert labor economist in the case, Oracle underpays women as compared to men in the same job codes by an average of $13,000 per year[9]. Oracle used detailed job codes that grouped workers together based on skills, knowledge and responsibility. This allowed the plaintiffs’ experts to conclude that it was valid to compare the workers within the same job codes. (The Google and Oracle pay equity cases are both ongoing as of the time of this post.)
Notably, these pay equity cases against large companies illustrate that all components of pay, base pay, bonuses and stock options, are all fair game for scrutiny. Of course, these cases start with one employee or a small group of employees who suspect or know of pay differentials. Eventually they rely on expert statistical analysis of large amounts of employment data sets in order to demonstrate the inequities occurring on a large scale across the companies.
Cases like these exemplify the need for large, California-based employers to remain committed to their missions of providing equitable working environments for all. While the California Equal Pay Act has existed for over 70 years, 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] This figure is the “uncontrolled” gender pay gap (sometimes referred to as the “opportunity pay gap”), which does not take into account factors such as education and years of experience that could explain the difference in pay. However, even when controlling for these factors, women earn only 98 cents for every dollar earned by men. This means that women still make less than men, even when doing the exact same job. PayScale. The State of the Gender Pay Gap in 2021 (March 24, 2021). Retrieved January 12, 2022, from https://www.payscale.com/research-and-insights/gender-pay-gap/#section02.
[2] Ibid.
[3] Employers with 100 or more employees are required to file an EEO-1 and must file a report with 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/.
[4] DFEH. California Pay Data Reporting (2021). Retrieved December 22, 2021, from https://www.dfeh.ca.gov/paydatareporting/.
[5] Ellis, et al. v. Google, LLC. Filed September 14, 2017 in the Superior Court of San Francisco.
[6] Lieff Cabraser. California Judge Certifies Class of 11,000 Former Female Employees in Google Gender Pay Bias Lawsuit (May 27, 2021). Retrieved January 12, 2022, from https://www.lieffcabraser.com/2021/05/california-judge-certifies-class-of-11000-former-female-employees-in-google-gender-pay-bias-lawsuit/. For more information, visit the case website at https://googlegendercase.com/.
[7] Alban, Susan. How to be a fair-pay CEO (August 25, 2020). Retrieved January 20, 2022 from https://fortune.com/2020/08/25/equal-pay-gender-race-discrimination-wage-gap/.
[8] Jewett, et al. v. Oracle America, Inc. Filed June 16, 2017 in the Superior Court of San Mateo.
[9] Altshuler Berzon. Court Certifies Class of Thousands of Oracle Women Employees in Equal Pay Act Case: Jewett, et al. v. Oracle America, Inc. (May 1, 2020). Retrieved January 12, 2022, from https://altshulerberzon.com/2020/05/01/court-certifies-class-of-thousands-of-oracle-women-employees-in-equal-pay-act-case-jewett-et-al-v-oracle-america-inc/.