An equal right for all is always a hot button topic and Rizo v. Yovino is a very hot button case. Many small and large businesses have paid particular attention to this case as it directly relates to how they compensate current and future employees. The Ninth Circuit Court of Appeals just issued a ruling reversing the United States District Court, Eastern District of California which ruled that an employer violated the Equal Pay Act by calculating a new employee’s salary using their prior salary.
Rizo v. Yovino
The Plaintiff, Aileen Rizo, was hired in 2009 into a management position as a math instructor. She was hired with a starting salary of $62,733 a year which was higher than her prior position but was at the lower end of the scale for the new position. In 2012 she learned that a male colleague was recently hired into the same position with a starting salary of over $10,000 more a year than her. She later learned that all of the men in her position were being paid a higher salary than she was. Rizo hired an attorney and filed a complaint against the Fresno County Office of Education alleging that they violated the Federal Equal Pay Act.
The Defendant, Fresno County Office of Education, answered the complaint by detailing the business rationale behind its procedure for salary determination. One of the four rationales was to base the starting salary off the prior salary with a five percent increase.
Many believe the Fresno County School System’s bright-line policy violated the prior salary/ reasonable consideration ruling laid out in Kouba v. Allstate Insurance Co. and further believe this ruling will hamper women’s ability to equal pay in the workforce. While the ruling follows the letter of the law, it does leave room for interpretation of the Equal Pay Act. How can women be protected under the Equal Pay Act if they historically have made less than their male counterparts.
California Equal Pay Act 2017
However, California has taken this Federal Equal Pay law into its own hands and given women a more definitive answer. California has its own law which mandates that a prior salary alone cannot rationalize a pay difference in two equally qualified individuals. The California Equal Pay Act was enacted on January 1, 2016 and detailed that salary history can be used as a determining factor; however, pay differences between the sexes must also be based on a minimum of one other factor. This past January California further tightened its Equal Pay Act by including salary differences between members of different ethnicity.
Further, keep in mind that the law prohibits an employer from retaliating against employees that discuss their salary even if that salary discussion leads to a wage lawsuit. As such, all California businesses should review their employee’s salary levels and make sure they are not violating either the Federal or California Equal Pay Acts.