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I'm curious about the following scenario. If a business hires people and pays them a commission, is the employer obligated to be neutral in how it directs sales to each employee, in cases where the employees have substantially similar skill, experience, and quality of work, or is equal commission rates enough?

For instance, if two car salespeople were paid the same amount per sale, but the dealership sent the majority of the potential customers to one of the two, even though they had substantially similar skill, experience, and quality of work, would that alone violate the California Equal Pay Act?

To create a scenario, consider a garden center that pays a small wage, but for the most part, employees get their revenue from commissions. The owner hires on their daughter, and even though other employees do a lot of work in handling customers and making sure the shop runs smoothly, the owner directs customers to her daughter for the final sale, making it difficult for anyone to get commission. Technically the wage is the same, and the commission rate is the same. But the owner is ensuring a disproportionate opportunity to obtain revenue, for substantially similar work.

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If a complainant establishes a gender pay disparity, she has established her prima facie case. The burden then shifts to the employer to justify the disparity. There is a four factor test.

In a commission setting, with sufficiently many employees of each gender doing the same job: 1. seniority - have the men worked at the company (substantially) longer 2. merit - it seems to me #3 is part of this, but maybe I don't know the correct legal definition of merit ; arrives on time, doesn't leave early, fewer unexcused absences, etc. 3. quality / quantity - do the men have a (substantially) higher ratio of sales to potential customers (quantity) or of more profitable cars (quality) 4. anything else relevant to the job - if you assume equal skill then this won't happen

If the employer can establish that any one or more of those factors is the reason for the pay disparity, the employer wins. In the scenario given, the employer can't argue quantity if he's controlling the quantity. But if all of the women are arriving late every day, can he punish them by giving them less opportunity. I would say more likely than not.

Employers aren't responsible for what customers do. If customers ask for men, he'd have to be careful. But ... A man applied for a job as a waiter at Hooters. He was rejected. He sued for gender discrimination, which I think Hooters didn't deny, and won. Hooters was required to, and did, hire him. He didn't last long, because customers didn't want him to serve them. If they were compelled to be served by him, they either left or did't tip him. The employer isn't responsible for that. (That's a story I heard a long time ago. I can't find a reference. It might not be true. But it could be.) But if customers just ask for a man, the employer probably should make a reasonable effort to convince them to work with a woman employee.

This really doesn't apply to a situation with two employees, one man and one woman.

The Equal Pay Act would apply, but with different rules. The woman would have to do more than show a gender pay disparity. She would have a much greater burden of establishing her prima facie case.

The issue is not each employee, its gender. Typically, employers aren't required to treat every employee the same. But they can't base different treatment on gender. If there were only two employees, the woman would have a difficult case. There could be any number of valid reasons why one salesperson is chosen over another. Probably, if the woman received very few customers, while the man had to work overtime, there'd be a stronger case. It's easy enough to assert that the man happened to be a better salesperson. The courts won't compel you to earn less money by giving each employee equal treatment. Employers are given great latitude in assessing individual employee's skills. This discussion could get very long and complicated. The Equal Pay Act is targeted at large employers with many employees of each gender where any given job has, or should have, a sufficiently balanced number of of men and women.

Following appears to be the test for fair pay under the California Fair Pay Act.

"Consider the following scenario: Store A is run by Bob. Bob has all female employees and pays them $15.00 per hour. Store B within the same company is run by Steve. Steve has male employees and pays them $20.00 per hour. Under traditional antidiscrimination law a case is very hard to establish. Is Bob really discriminating against women? Is Steve really favoring men? Obviously it is not clear and a gender discrimination claim based on FEHA or Title VII would probably be an uphill battle. In fact, unless some sort of coordination between the managers could be established, or unless there were some evidence that Bob had intentionally paid women “less” (for example, if he had previously paid men more) the intent element of a discrimination claim would unlikely be met.

However, under section 1197.5, the employer has to justify the practice. It must affirmatively show that the wage di erential is based on one or more of four factors, which must themselves be “applied reasonably”: 1. A seniority system; 2. A merit system; 3. A system that measures earnings by quantity or quality of production; or 4. A bona de factor other than sex, such as education, training, or experience.

The analysis was that once an employee proved a gender pay disparity, she had established a prima facie case. The burden then shifted to the employer to establish the existence of one of the exceptions. " https://www.sfbar.org/forms/sfam/q12016/CA-fair-pay-act.pdf

  • While there's a lot of interesting commentary here, and I do thank you for the attempt, very little of the answer actually focuses on the general nature of my question. It's a great argument if it's a gender disparity and a WAGE gap, but that's about it. This is a question about a more general reason for the difference in pay, and moreover, it's not a difference in wages, but rather a difference in opportunity to obtain commissions due to an intentional imbalance in how sales are distributed. – Daniel Goldman Aug 26 at 12:05

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