Are You Getting Fair Pay? The Ins and Outs of Labor Laws In California Minimum Wage

“Am I getting paid fairly?” -this is something every employee wonders about at some point. Because no one wants to be paid too little compared to the minimum wage and other employees having the same qualifications and designation in the company.

There are laws around fair pay, and most employers claim that there are no pay discrepancies in their organizations. If we go by statistics, a large percentage of workers still do not receive the pay they deserve.

There are numerous reasons why the pay gap exists, such as discrimination based on gender and age, and the list is exhaustive.

If you think you are not getting fair pay, this article will enlighten you about your rights. Below we will discuss the ins and outs of labor laws in California and what to do if your employer does not pay you a fair amount.

What is Fair Pay?

Fair pay is often confused with equal pay and pay equity. However, it is a different concept that refers to a compensation package that is appropriate, equitable, and aligned with the value of the work an employee performs.

Fair pay considers various factors, including skills, experience, education, and more when determining the compensation an individual should receive.

Determining fair pay can be influenced by several considerations:

  • Internal Equity 

It means employees who perform similar jobs within an organization should receive comparable compensation based on experience, performance, and qualifications.

  • External Equity 

External equity ensures that an individual’s compensation should be competitive with what other organizations offer for similar roles in the job market.

  • Equality and Inclusion 

The concept of fair pay also includes equality and inclusion so that employees of different genders, races, and protected characteristics receive the same compensation as their coworkers.

  • Cost of Living 

Another factor to consider is the cost of living in a specific geographic area. Fair pay should be adjusted to reflect the local cost of housing and other essential expenses to ensure that the employee can maintain a decent standard of living.

5 Signs that You Are Not Getting Fair Pay

There is no room for assumptions if you think your employer is not paying you fairly. Whether you want to discuss it with the accounts department or file a complaint against the misconduct, you must be certain about the pay gap.

Here are some signs to look out for to determine if what you think exists in reality.

1. Your Salary is Less than the Average Salary According to the Online Data 

If the internet has done one thing well, it creates salary transparency. Now you can quickly log onto websites like AmbitionBox to check the average salary for your designation to get an idea of whether you are underpaid.

If your salary is less than the average salary listed online, your employer is probably not paying you fairly. However, there are some other things to consider, including the employment benefits you are receiving and the gap between your salary and what is listed online.

The best thing you can do is skim through the job listings by your company to know the average salary offered for your designation.

2. Your Responsibilities have Increased, but Your Salary Didn’t 

If the responsibilities you shoulder have increased in reality but not on paper, this might indicate that you are not being paid fairly. When your designation in your company changes, and it brings more duties for you, it should be fairly compensated.

While there are several factors that affect the increment. For example, if your employer has awarded you certain benefits, such as better health insurance, it might count as a “raise.”

3. Your Salary Does Not Account for Inflation 

One of the clear signs of being underpaid at work is when the growth in your salary is less than the inflation rate. In 2023, the minimum wage in California was revised to $15.50, according to the Department of Labor Relations.

4. Your Colleagues are Being Paid More 

Fair pay means everyone in the organization with the same skills, performance, and designation should receive comparable pay. If your coworkers come from the same educational background and experience but receive better pay than you do, you are likely not getting paid fairly.

Sometimes similar designations to your role may require the same education and experience at your company. However, just because the designations are different for the namesake does not mean you should be paid less compared to other employees.

If this is the case at your workplace, it is time to have a dialogue with your employer to get the pay gap corrected.

5. You are Working Overtime with No End in Sight

Under California labor law, employees must be paid overtime for any hours worked over 40 hours in a workweek at the rate of one and a half times the regular pay rate (minimum wage = 1.5 X $15.50 per hour).

If you are eligible for overtime according to the law but still do not receive it, you are probably not getting paid enough.

Reasons Why Employees Do Not Receive a Fair Pay 

Labor Laws In California Minimum Wage

There are not one or two but several reasons why some employers do not provide fair pay to their workforce. All of these reasons are unlawful because it is necessary for employers to maintain a fair pay policy.

  • Wage Discrimination 

Wage discrimination based on factors such as gender, race, ethnicity, and age can lead to unequal pay for employees performing similar work. It can occur due to conscious bias or structural inequalities within an organization. Besides equal pay, wage discrimination at work also violates the California Fair Pay Act.

For example, if women are paid less in a workplace than male employees with the same performance and work responsibilities, it indicates wage discrimination based on gender.

  • Lack of Transparency 

When employers do not have clear and transparent pay structures, it can lead to unfairness and unequal pay. Without a comprehensive understanding of how salaries are determined, employees may be unaware of the factors contributing to their overall pay.

As a result, most workers find it difficult to identify and address pay disparities, and employers continue to exploit the loopholes.

  • Negotiation Disparities 

Workplaces are nothing less than a battleground, especially when negotiating a salary. Nevertheless, it is important for employers or hiring managers to offer fair pay, such as the minimum wage set by state authorities, to the employee, it does not always happen.

Individuals who are less experienced may end up with lower pay compared to their coworkers who negotiate effectively. The disparity can disproportionately affect candidates from marginalized groups, who may face additional barriers in negotiating fair pay.

  • Inadequate Performance Evaluations 

Performance evaluations play a crucial role in determining raises and bonuses. If the process is flawed or biased, it can lead to unfair pay discrepancies.

When an employer does not accurately address an employee’s achievements and contributions, they may receive lower compensation despite performing at the same level or even outperforming their colleagues.

  • Lack of Awareness and Advocacy 

Sometimes employees are unaware of their rights or the resources available to address the pay issues. They might not have access to information about fair pay practices or legal protections.

Additionally, a lack of collective bargaining power or representation can limit workers’ ability to advocate for fair pay and negotiate for better compensation.

The California Fair Pay Act and the Key Provisions  

The California Fair Pay Act was officially considered law in 2016. It is widely lauded as one of the strongest equal pay legislation in the nation, as it prohibits employers from conducting unfair practices when paying employees.

The law aims to ensure that employees, particularly women, receive equal pay for performing substantially similar work as that male colleagues.

However, the act protects every employee working under a California employer to ensure they receive fair pay for the work done.

The latest provisions in the California Labor Code §1197.5 include the following:

  • Equal Pay for “Substantially Similar” Work

The law requires all employers to pay equal pay to employees who perform work that requires skill, effort, and responsibility that is substantially similar, regardless of gender and protected characteristics. Job descriptions and titles are not alone sufficient to justify pay disparities, says the law.

  • Comparison of Pay Across Locations 

According to the act, employees who work at different locations for the same employer must receive equal pay for the same work. For example, if employees working in the San Diego office get paid $20 per hour, the employees working in Avalon must receive a comparable amount.

This provision prevents California employers from evading pay equity by segregating employees in different locations.

  • Justifications for Pay Differentials 

In some cases, employers are allowed to pay employees differently, provided the wage difference is based on factors including a seniority system, merit, quality/quantity of work, or a bona fide factor other than gender.

However, even in these cases, the pay disparity must be job-related and consistent with business necessity.

  • Expanded Statute of Limitations 

Under the law, an employee gets 2 years from the date of the violation to file a complaint. But the statute of limitations gets extended to 3 years if the violation is wilful and there exists a case of pay discrimination exists.

It is crucial to contact a labor law lawyer in Los Angeles to know more about your rights and to file a complaint before the period of the statute of limitations ends. Call us at 310-929-2190 to book a free consultation and get the fair pay you deserve.

What to Do if You Are Not Paid Fairly? 

When you are sure that the pay gap is unlawful and your employer knows about it, you can take legal action. Since the matter comes under the California Department of Industrial Relations, you must know how the commissioner’s office can help you.

  • Gather Necessary Information

Your entire claim depends on the evidence you can produce to prove the illegal pay disparity. Make sure you have all the required information, such as pay stubs, time records, and any written communication regarding your compensation.

You can seek help from your fair pay lawyers in Los Angeles, about what documents to gather and how to prepare a strong file.

  • Familiarize Yourself with the Labor Laws 

Irrespective of your designation and the industry you work in, it is imperative to know the employment laws. Besides the law, you must review your company’s policies on compensation and pay practices to understand the standards they should be following.

  • Raise Your Issue with the Employer 

Sometimes employers are unaware whether there exists a pay gap, and you must tell them about your issue. Reach out to the right authority, such as the human resources department, and submit your complaint in writing.

Create a copy of your complaint, and do not forget to collect the receipt- as you will need to attach these documents if you decide to reach administrative agencies like DIR.

  • File a Complaint with Labor Authorities 

Depending on your jurisdiction, you may have the option to file a complaint with the labor department or a relevant regulatory agency. If you work in the Los Angeles or San Diego area, you can file your complaint with the labor commissioner’s office.

  • Seek Legal Advice 

California is an at-will state, and the federal and state laws are too complicated to navigate through. With the help of an attorney, the legal route becomes easier as these professionals determine the best course of action for your case.

At Hershey Law, we provide you with all the legal help you need to fight against your employer. Our California employment lawyers sit with you to discuss your legal options and then proceed with the case. We can also negotiate with your employer to settle the matter out of court while securing fair compensation for you.

  • Consider Collective Action

If multiple California employees, for example, five or more employees, are experiencing similar pay issues, it may be beneficial to join forces and pursue collective action. This includes filing a class-action lawsuit or engaging in collective bargaining with the help of your employment law attorney.

For fewer employees, it is beneficial to file individual complaints.

The Role of Labor Commissioner’s Office in Your Fair Pay Claim 

The labor commissioner’s office has a significant role in resolving your fair pay claim in California. From accepting your complaint to providing remedies, and allowing you to file a lawsuit,  here is how the administrative agency helps you get justice.

  • Complaint Filing 

As explained in the previous section, this branch of the Department of Industrial Relations provides you with a mechanism to file complaints. Apart from fair pay, you can also report other wage and hour violations.

👉Must Read: Understanding California Wage and Hour Laws

  • Investigation and Enforcement 

Upon receiving your complaint, the agency will initiate an investigation to determine the allegations and if any labor law violations have occurred.

The commissioner’s office has the authority to examine a pay data report, interview witnesses, and take other necessary steps to assess the situation.

  • Mediation and Resolution 

In some cases, the administrative agency may attempt to mediate a resolution between you and the employer. The process involves bringing both parties (you and your company) and the legal representatives to settle the matter. Here the commissioner’s office acts as a third party to facilitate the process.

  • Legal Proceedings 

If mediation does not result in a resolution, or if the employer fails to cooperate, then the commissioner’s office may take legal action on your behalf. Or you can also “obtain a right to sue” and file a lawsuit against the employer with the help of our attorneys.

Trust Hershey Law to Help You Secure Fair Pay and Compensation 

As an employee, you deserve “fair pay,” and your employer is liable to pay it to you, even without you asking for it. But things are not simple, and most workers struggle to receive the least amount they deserve.

If you have tried all available remedies, such as writing a complaint to your employer, and still there is no resolution, you must consider legal advocacy.

We can represent you in the commissioner’s office and court if you decide to sue the employer to help you recover the damages you have suffered and the fair pay.

Dial 310-929-2190 to discuss your case with the most dependable employment lawyers in Los Angeles and Orange County.