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By: Anastasia Osbrink
For years, employers across the U.S. have taken into account what an individual was making at his or her current job in assessing how much they would need to pay them if they left and joined the employer. And, for years, when one employee claimed discrimination based upon sex under the federal Equal Pay Act because he or she was not paid as much as another employee of another sex performing similar duties, the employer would rely upon prior pay as a basis for the pay differential between the two employees.
Well, no more in states in the Ninth Circuit (Alaska, Arizona, California and Hawaii). The Ninth Circuit recently made clear that employers cannot justify pay disparity between employees based on pay history from prior jobs under the Equal Pay Act. (Rizo v. Yovino, No. 16-15372 [9th Cir. Feb. 27, 2020] [en banc].) The defendant in Rizo, the Fresno County Office of Education, argued that the plaintiff’s disparity in pay fell did not violate the Equal Pay Act because the County sets new employees’ salaries based on a 5% raise over their previous salaries. The Ninth Circuit disagreed with the defendant, holding that pay history from a prior job is not job-related and not an acceptable basis for a pay disparity.
Additionally, the Ninth Circuit pointed out that it would defeat the purpose of the Equal Pay Act to allow pay disparity based on gender to self-perpetuate because of prior discriminatory pay. It is also worth noting that in 2018, AB 168 made it illegal in California to seek salary histories from job applicants. Therefore, not only is it illegal for employers in California to ask about salary history, it is now also clear based on the ruling in Rizo that they should not base a system of pay on prior job salaries even if that information is voluntarily provided by job applicants.
Please contact Anastasia F. Osbrink at [email protected] if you have any follow-up questions about the Rizo ruling.