The great recession of 2007 to 2009 affected many workers in the United States, limiting their negotiation power. One of the most important factors that further drove down employee negotiation power during this time was the increasing unemployment rate, which meant that there were many others who are qualified for a position and willing to earn much less to be employed. During a period as this, it became harder for employees to push for certain rights as they had to protect their jobs and source of income. During this time, new employees found that they earned much less compared to others who were performing the same work as specified by their job descriptions.

Although, the two-tier wage system appeared in the early 1970s, not until the recession period did it become more widespread among industries leading many to hire the services of an unequal pay attorney in San Francisco to handle their legal bid for increased pay.

In most cases, when an employer seeks to minimize and cut down on the wage scale within the workforce, friction may erupt and this may instead lead to a two-tier wage system where the employers recruit new intakes – possibly with the idea that they will replace the existing staff over time- and pay them a lower wage compared to former employees.

However, greater trouble may arise when the new intakes notice the disparity in the amount earned thus causing them to feel cheated and unfairly treated. While there are several disadvantages to this, perhaps the greatest is in the form of a reduction in productivity, job satisfaction erosion, and an overall lack of interest. Such knowledge as this can also erode or weaken the employee’s relationship with others in the workplace, especially in an effort to differentiate themselves.

Years after the great recession, employment rates have increased and unemployment rates have dropped, putting employees in a better position to bargain and demand certain privileges which were impossible in times past, especially during the great recession. With employees becoming stronger, companies are getting more pressure to rollback their policies which supported the two-tier wage, offering new and existing employees the same amount for the same level of work.

While this is still in the works across several companies, below are some of the frequently asked questions you should be familiar with, especially if you are willing to pursue the total elimination of the two-tier wage system in a work environment.

  1. The California Equal Pay Act: is It New?

The Equal Pay Act prohibiting employers from paying employees different wages for the same job done has been active for years. Under this act, employers cannot pay employees of a different gender less than those of the other gender especially if they both are carrying out the same tasks as stated in their job description or as required by the job role. As a means of strengthening the existing Equal Pay Act, the governor of California signed the Fair Pay Act into law in 2015. The Fair Pay Act, once effective served to further strengthen the pre-existing act.

2.  Are There Significant Changes That Can Be Attributed to the Equal Pay Act?

The passing of the Equal Pay Act brought into existence some perks which protect both employers and employees. Some of the changes that have been in effect as part of the passing into law of the Equal Pay Act include:

–         The act requires that all employers pay their employees who perform the same job an equal pay. In this sense, the same job can be classified based on the experience, skillset, training, or other requirements as demanded by the specific job roles. This means that if two employees are applying the same level of effort, expertise, or require a level of training to carry out specific jobs, then, they ought to be paid equally.

–         This Act allows employees to enjoy equal pay across their industry for the job done instead of having to base their wages on the internal structure that has been created by the employer.

–         This Act also makes it harder for employers to justify pay inequalities among employees of a different gender.

–         The Act ensures that employers who are offering unequal pay are held accountable for any factors that may have informed their decision. This means that employers are tasked with the responsibility of proving the basis for offering unequal pay for similar job roles.

–         The Act also forbids employers from retaliating against employees who seek to enforce their rights to equal pay. With this protection, it has become illegal for employers to punish employees for demanding equal pay. It also makes it easier for employees to investigate wage information from fellow co-workers.

–         The Act also offers protection to employers, extending the time frame for maintaining minimum wage and other employment records from two years to three years.

3. When Do the Changes Contained in the Act Take Effect?

The changes as specified by the Act took effect on January 1, 2016.

4. Have There Been Further Updates to the Equal Pay Act Since January 1, 2016

Since the introduction of the Fair Pay Act in 2015 and its effectiveness as of January 1, 2016, additional amendments have been made to the act. The Governor of California signed a bill on January 1, 2017. The amendment makes accommodations for race and ethnicity, listing both as protected categories. The amendment which came into full play on January 1, 2018, prohibits employers from offering employees of certain races and ethnicity lower wages compared to others with similar job descriptions or roles. The amendment has also been extended to cover public employees. The Labor Code Section 432.3 which became effective on the first day of 2018 forbids employers from demanding the salary history and other related information of an applicant during the interview stage and after.

5. What Perks Does the Equal Pay Act Offer?

The amended Equal Pay Act ensures that employees are paid the right and equal wages across the board for a job done and specific job roles. In addition, the amended Act ensures that employees of different sex are offered the same wages for similar work done.


By: Fred Geonetta

Frederick J. Geonetta is a graduate of the University of California, Hastings College of Law. His legal practice is entirely devoted to litigation. Mr. Geonetta has spent the past 25 years in private practice representing both plaintiffs and defendants who have been harmed or wronged by the actions of others or who have been falsely accused of causing harm to others. He represents clients across the U.S. and international clients who seek U.S. legal advice or representation.