How to Comply with the New CA Fair Pay Act

This article explains how a point factor analysis turns out to be one of the most effective frameworks that can be used for both internal equity as well as a defensible compensation strategy.

In the October issue of the SharedHR Bulletin, our colleague, Brandi Gordon, wrote a succinct summary of employer obligations resulting from the newly passed CA Fair Pay Act. The article described key changes the existing Fair Pay laws, specifically, that pay needs to be comparable for “substantially similar work” and that salary comparisons are no longer limited to “within the same establishment.” This new definition creates the opportunity for a claimant to draw distinctions between his or her pay and the pay of opposite sex employees performing similar work to show disparity.

Under this new California law, effective 1/1/16, the pivotal question becomes the definition of “similar” work. The new law is forcing employers to review their pay polices and look at pay horizontally across the organization. According to a recent posting on SHRM, Salesforce CEO, Mark Benioff, announced in December that Salesforce would make $3 million in salary adjustments to put women’s pay on par with male counterparts. Employers now bear the burden of demonstrating that wage differences between male and female employees performing “substantially similar work” are due to some “bona fide factor”. But where do you start?

A point factor analysis is an objective method of determining the relative score of a job within an organization. Jobs are broken down into factors such as supervisory controls, complexity, physical demands, scope of effect or other factors identified by the employer. The responses to these questions are given a score and totaled for each factor. Each factor is given a weight and this effects the contribution made to the overall total score by that factor. Jobs are ranked based on the skills (and other job-related elements) required, in the abstract. The weighting is based on the significance to the organization, and this allows the pay scheme to be linked to the organization’s strategy. The jobs can then be banded into salary grades related to pay.

One of the biggest advantages of a point factor approach (particularly if performed by an outside group) is that the process is systematic and analytical, thus meeting the “bona fide factor” test required by recent amendments to the CA Fair Pay Act.

A critical factor in this type of job evaluation is that it is the position and role that is assessed, not the person currently performing the job. This means that the job score is both unrelated to the person doing the job and perceived as fair. These factors are essential in order to meet the new objective standards in the revised law.

If you are interested in learning more about this job factor approach, please contact our office.

By Saul Macias, MBA, PHR – VP of Professional Services/Principal

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services

Your Work Style Matters

In addition to lots of necessary year-end action items, it is also a season of giving and reflection. In his book, Give and Take – A Revolutionary Approach to Success, author and Wharton Business School professor, Adam Grant, encourages professionals to take stock of their work styles. Often managers do not fully recognize the impact their communication style has on their fellow workers. Most have witnessed the manager who takes the happiness from the room when he or she enters. In contrast, it can be subtler to recognize the manager whose positive attitude consistently spreads joy – even in the most stressful times.

In his book, Grant identifies three distinct work profiles:

  • Takers: those that strive to get as much value as they can;
  • Matchers: those who seek for an equal balance in what they give and get; and
  • Givers: those who support and contribute without an expectation of reciprocity.

Of course, givers are the most successful contributors to any workplace. Grant defines “giving” as something as simple as making an introduction, special recognition, or providing constructive feedback to a colleague. At the same time the givers are giving, they are actually helping themselves by strengthening work relationships, networking, and supporting a culture of positive interaction that translates to success in their workplace. According to Grant’s research, givers often reap the benefits of these actions in their own careers.

Interestingly, givers are both the most successful and the least successful group, according to Grant’s research. “Although some givers get exploited and burn out, the rest achieve extraordinary results,” Grant comments. The lesson, according to the author, is to learn to be a giver without being a doormat.

Grant also suggests some interesting action items for his readers, such as: test your giving quotient, run a reciprocity ring, and help other people craft their jobs. You can learn more about this compelling book at http://www.adamgrant.net/home/book.

Significance

As the year closes and all of us take inventory of accomplishments and lessons of the past year, it is useful to reflect on how our actions and approach impact others in the workplace. This book underscores an important pearl for any career: “Life is short – be happy.”

By Amy Keleman, SPHR – Director of Professional Services/Senior HR Consultant

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services