If an employee receives a merit-based raise, do we have to pay other employees the same wage?
HRCalifornia
No, although the California Fair Pay Act wants employers to pay employees who do substantially similar work the same, differences in pay are allowed if they are based on legitimate, bona fide factors. Bona fide factors that may lawfully justify a pay disparity include:
- A seniority system;
- A merit system;
- Quantity or quality of work; or
- A factor other than sex, race or ethnicity, such as education, training or experience.
If an employer is using the fourth factor to justify a pay disparity, the employer has to
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