Bill that would ban companies from paying minority employees less than white workers for ‘substantially similar’ work is first of its kind in US

A California lawmaker has introduced a bill to end wage discrimination based on race or ethnicity, building on a recent law that expanded rights for gender pay equity in the state.

The bill, SB 1063, is the first of its kind in the nation and would explicitly prohibit employers from paying lower wages to minority employees compared to white employees when performing “substantially similar” work.

Introduced on Wednesday, it would also provide protections to workers who ask for salary information from employers or co-workers by banning retaliation, though it does not require an employer to provide salary comparisons.

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“It’s a crime to think that anyone could work on a job and be paid less just because of your race and/or your gender,” said state senator Isadore Hall III, author of the measure, at a press conference announcing the bill. “It’s an economic injustice, it’s discriminatory and it’s just outright wrong.”

Hall pointed out that a recent study found that African American men are paid only 75% of the salary of Caucasian male workers on average. But while pay disparity affects both genders, when it comes to race and ethnicity, minority women still fare worse than their male counterparts.

African American women make 63 cents for every dollar a white man makes, while Hispanic and Latina women earn 54 cents for each dollar a Caucasian man earns. Asian women do best, bringing in 90 cents on the dollar compared to Caucasian men. For each of those categories, minority women also make less than men of the same race or ethnicity. Those differences add up to $39bn each year in lost wages for minority women in California.

“Substantially similar” was first used in last year’s California Fair Pay Act, which targeted unequal pay between men and women. That law is considered the strongest pay equity provision in the US.

The wording replaces the notion of “equal work”, which created a loophole that allowed pay discrimination based on job titles. That meant if people did similar work but had different labels, there was little recourse to object.

For example, advocates pointed to the pay difference between mostly female housekeepers in the hospitality industry who clean rooms, compared to mostly male janitors who are usually paid more to clean lobbies and other public spaces. Under the new code, those positions would likely be considered “substantially similar” and qualify for equal pay.

California’s Equal Pay Act, first passed 65 years ago, currently does not address race and ethnicity, though other state and federal laws do provide some protection.

SB 1063 mirrors the language of last year’s Fair Pay Act, which also put the burden on employers to prove that a pay difference is justified if there is one. Pay differences are still allowed based on merit, education or seniority systems.

Hall said that he advocated including race and ethnicity in that measure, but authors instead wanted to focus solely on gender to simplify the issue.

“You can’t, unfortunately, cram everything in at one time,” said Hall, calling his measure “the next logical step” to address income inequality.

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The Fair Pay Act went into effect in January 2016, and some companies doing business in the state have begun internal compliance audits to verify they are paying both genders equally. That, said Shannon Smith-Crowley of the American Association of University Women, should be seen as an opportunity to tackle the race issue before it becomes law.

“While employers are assessing whether women and men are paid fairly, it gives them the opportunity to include other factors, such as race and ethnicity,” she said. “It’s critical for employers now to take a step back and reassess what they are paying. They may not be intending to discriminate. They are just using a system set up decades ago and they’re perpetuating that discrimination.”