Introduction
On June 10, 2019, Governor Kay Ivey signed into law the Clarke-Figures Equal Pay Act (“CFEPA”). The CFEPA, in large portion, mimics the federal Equal Pay Act (“EPA”). The CFEPA prohibits race or sex discrimination in pay, as well as retaliation based on an applicant’s failure or refusal to disclose their wage history. In addition, the CFEPA sets forth employer recordkeeping requirements. All employers, regardless of size, are subject to this new law.
Sex and Race Discrimination
The CFEPA prohibits employers from pay discrimination based on employees’ race or sex “for equal work within the same establishment on jobs the performance of which requires equal skill, effort, education, experience, and responsibility, and performance under similar working conditions.” However, like the EPA, wage differences may be based on: 1) a seniority system; 2) a merit system; 3) a system that measures earnings by quantity or quality of production; and 4) a differential based upon any factor other than race or sex.
Damages available under the CFEPA are limited to the illegal wage differential plus interest. The CFEPA does not provide for recovery of other compensatory damages, punitive damages or attorneys’ fees.
Recordkeeping Requirements
Next, the CFEPA states that employers “shall adopt” the recordkeeping requirements set out in the federal Fair Labor Standards Act regulations at 29 C.F.R. Part 516. These requirements include, among others, certain payroll documents, wage rate tables and earnings records.
Salary History
Most significantly, the CFEPA provides: “An employer shall not refuse to interview, hire, promote, or employ an applicant for employment, or retaliate against an applicant for employment because the applicant does not provide wage history.” Specifically, in the Act, wage history is defined as “the wages paid to an applicant for employment by the applicant’s current or former employer.”
Although the CFEPA does not prohibit an employer from inquiring about an applicant’s wage history information altogether, it does prohibit retaliation in the event an applicant fails, or refuses, to provide the employer his or her wage history information.
Accordingly, an employer may continue to ask an applicant about their wage history, but the employer will bear the risk of a possible retaliation claim. On the other hand, employers will likely be best served not asking applicants about wage history, but instead ask the applicant about their salary or compensation expectations. This may seem like a fine distinction, but it is an important one.
Conclusion
The CFEPA takes effect September 1, 2019. All Alabama employers should begin taking the necessary steps to comply with the CFEPA. We will continue to assess the new law and provide the necessary updates. We remain available if you have any questions.
