Company Will Pay $19.5 Million to Settle Gender Pay Discrimination Claim

Aug 8 2016 - Compensation, Discrimination - HRWatchdog

Gender Pay Discrimination Fair Pay Act

Employers need to aware of the requirements under California’s Fair Pay Act.

News outlets are reporting that a large semiconductor and telecommunications equipment company located in San Diego has agreed to pay $19.5 million to settle a pay discrimination claim. A proposed class of over 3,000 female employees alleged that Qualcomm denied them equal pay and equal opportunities for promotion. The company agreed to the settlement before the lawsuit was actually filed.

According to allegations in the complaint, female employees working in the science, technology, engineering and mathematics (STEM) fields earned less than their male counterparts. Moreover, women hold less than 15 percent of senior leadership positions and mostly male managers make promotion decisions, leading to women being promoted less often than men.

The complaint also alleged that the company maintained an unwritten policy of rewarding employees who work late over those who arrive early and leave as regularly scheduled, impacting women with children.

The women claimed that Qualcomm’s practices violated the California Fair Pay Act, the California Fair Employment and Housing Act, the Equal Pay Act and Title VII.

In a statement sent to the Associated Press, Qualcomm stated that it is committed to fair and equitable treatment of employees. While the company felt that it had strong defenses to the lawsuit, it “elected to focus on continuing to make meaningful enhancements to our internal programs and processes that drive equity and a diverse and inclusive workforce which are values that we share and embrace.”

In addition to the monetary settlement, the company has agreed to make policy changes to ensure an equitable workforce.

Don’t Forget California’s Fair Pay Obligations

California employers need to be aware of new requirements under the California Fair Pay Act that became effective January 1, 2016. SB 358 amended Labor Code section 1197.5 to ensure that women are paid equally for work that is substantially similar to the work of their male colleagues. California’s Fair Pay Act provides more protections than federal law.

While equal pay for equal work has been the law in California for decades, the California Fair Pay Act clarified and expanded previous state law. Under the new California Fair Pay Act, the term “equal work” has been removed. Employers are prohibited from paying any of their employees less than employees of the opposite sex for “substantially similar work.”

The burden is on employers to justify pay differentials from an acceptable list of factors that must be applied reasonably. The relied upon factors must account for the entire wage differential.

Employers also can’t prohibit employees from disclosing their wages, discussing the wages of others or asking about another employee’s wages; i.e., no “pay secrecy.”

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

You can find out more information about the California Fair Pay Act and other 2016 laws affecting California employers in An Overview of New 2016 Laws Affecting California Employers (for non-members) and members can access this white paper. Members can find out more information on Gender Wage Equality, including employer guidance, in the HR Library. Not a member? See how HRCalifornia can help you.

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