New Equal Pay Law could Haunt Hollywood Studios

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California’s newly-enacted Equal Pay Act could have a far-reaching impact on the compensation practices of top Hollywood film and television production studios.

The new legislation, signed by Gov. Jerry Brown on Tuesday, expands California’s existing equal pay protections while shifting the burden to state employers to prove that they do not pay women less than their male counterparts for doing “similar” work.

The law, set to take effect January 1, further mandates that state employers can only justify higher compensation for men if they can prove that the decision was based on merit, seniority or other “bona fide factors other than sex.”

The law will undoubtedly affect the state’s entertainment industry, where issues of women’s compensation have returned to the forefront of debate. In a landmark moment at this year’s Academy Awards, Best Actress winner Patricia Arquette used her acceptance speech to call for an end to wage disparity in a broadcast that was seen by roughly 35 million people.

The bill’s author, state Sen. Hannah-Beth Jackson (D-Santa Barbara), credited Arquette’s Oscar moment with providing the momentum necessary to ensure its passage, according to the Los Angeles Times. And on Wednesday, Arquette praised the signing of the bill, calling it a “critical step toward ensuring that women in California are seen and valued as equals.”

The law will likely change the long-held compensation practices of top film studios, who have in the past determined salaries paid to actors, directors, writers and executives using what could be described as subjective criteria.

The salaries of the actors appearing in last year’s hit film American Hustlerevealed in internal Sony emails leaked in last year’s massive hack of the studio. are often held up as an example of Hollywood’s wage disparity problem. Megastar Jennifer Lawrence, fresh off of the latest installment in the highly lucrative Hunger Games franchise and a Best Actress win for Silver Linings Playbook, was given 7 percent of Hustle‘s back-end grosses. Amy Adams, a critical darling who had been nominated for four Academy Awards to that point (and was ultimately nominated for Hustle), also got 7 percent. Meanwhile, the film’s male stars, Christian Bale, Bradley Cooper and Jeremy Renner, each received 9 percent.

News of the pay gap on Hustle caused a stir in Hollywood: shortly afterward, Charlize Theron demanded (and received) a $10 million increase in her salary for The Huntsman, bringing her pay up to what her male co-star Chris Hemsworth earned for the film. Lawrence herself negotiated a whopping $20 million fee for the upcoming sci-fi film Passengers, a salary that will pay her double what her male co-star Chris Pratt will earn for the film.

Now, with the passage of the Equal Pay Act, studios will now need to take a more through, cautious approach to ensure they are providing equal pay in compliance with the law.

“I think you’ll see studios and their counsel take it more seriously than they have in the past,” attorney Seth Neulight explained to the Times. “There is now another tool in the toolbox for female actors to speak out.”