CCP Pay Equity & Legal Compliance 3 — Questions and Answers
Question 1: California's Pay Data Reporting law (SB 973/SB 1162) requires private employers with 100+ employees to report pay data broken down by which categories?
- Race/ethnicity and sex by EEO-1 job category (Correct answer)
- Age and tenure by department
- Education level and years of experience
- Job grade and pay band only
Correct answer: Race/ethnicity and sex by EEO-1 job category
California's pay data reporting law requires employers to report median and mean hourly rates by race/ethnicity and sex within each EEO-1 job category.
Question 2: When conducting a proactive pay equity audit, which approach is most effective at preserving attorney-client privilege over the findings?
- Having HR conduct the audit independently
- Commissioning the audit through outside legal counsel under attorney work-product doctrine (Correct answer)
- Using a third-party consultant with no legal oversight
- Documenting findings in internal HR system notes
Correct answer: Commissioning the audit through outside legal counsel under attorney work-product doctrine
Structuring the pay equity audit as work product under the direction of legal counsel helps protect sensitive findings from discovery in subsequent litigation.
Question 3: An employer sets starting salaries for new hires based on their prior salary history. Under which legal framework is this practice most likely to be challenged?
- FLSA minimum wage provisions
- State salary history ban laws (Correct answer)
- ERISA fiduciary rules
- NLRA collective bargaining requirements
Correct answer: State salary history ban laws
Over 20 states and localities have enacted salary history ban laws that prohibit employers from relying on prior pay to set new hire compensation, as this can perpetuate historical pay gaps.
Question 4: What is the primary purpose of pay transparency laws that require employers to post salary ranges in job postings?
- To simplify payroll tax calculations
- To empower candidates and employees to negotiate fairly and identify pay disparities (Correct answer)
- To standardize job classification systems nationally
- To ensure compliance with minimum wage laws
Correct answer: To empower candidates and employees to negotiate fairly and identify pay disparities
Pay transparency requirements in salary postings aim to reduce information asymmetry, enabling workers to negotiate informed and helping identify systemic inequities.
Question 5: A compensation professional is calculating the adjusted pay gap. Which best describes the difference between the 'unadjusted' and 'adjusted' pay gap?
- The unadjusted gap measures cents per dollar; the adjusted gap measures annual salary difference
- The unadjusted gap is the raw difference; the adjusted gap controls for legitimate factors like job level, tenure, and performance (Correct answer)
- The unadjusted gap includes bonuses; the adjusted gap excludes variable pay
- The unadjusted gap is self-reported; the adjusted gap is verified by auditors
Correct answer: The unadjusted gap is the raw difference; the adjusted gap controls for legitimate factors like job level, tenure, and performance
The unadjusted (raw) gap reflects the overall difference in average pay, while the adjusted gap isolates unexplained differences after accounting for legitimate compensable factors.
Question 6: Under Title VII of the Civil Rights Act, pay discrimination based on race, color, religion, sex, or national origin applies to employers with how many employees?
- 10 or more
- 15 or more (Correct answer)
- 25 or more
- 50 or more
Correct answer: 15 or more
Title VII covers employers with 15 or more employees, which is a lower threshold than many other federal employment laws.
Question 7: Which of the following is an example of a 'factor other than sex' defense that courts have generally NOT accepted as a valid EPA affirmative defense?
- Higher prior salary negotiated by the male employee (Correct answer)
- Completion of a relevant educational degree
- Geographic pay differentials
- Shift differential premiums
Correct answer: Higher prior salary negotiated by the male employee
Following the Ninth Circuit's Rizo v. Yovanovitch decision, courts have increasingly rejected prior salary as a standalone 'factor other than sex' because it may perpetuate historical discrimination.
CCP Pay Equity & Legal Compliance 3
California's Pay Data Reporting law (SB 973/SB 1162) requires private employers with 100+ employees to report pay data broken down by which categories?