Overview: Under the Equal Pay Act (EPA) as well as state and local fair pay acts, men and women are required to receive equal pay for equal work. Generally, the jobs do not have to be identical, but need to be substantially equal in terms of skill, effort and job responsibility, and performed under similar working conditions. The term pay pertains to not just salary, but also overtime, bonuses, vacation and holiday pay, stock options, life insurance and all other benefits and compensation of any kind paid to employees. Employers can defend a claim of wage discrimination under a seniority system, merit system, a system measuring earnings by quality or quantity of production or if wages were set based on a factor other than sex. Employers also should know that Title VII further prohibits wage discrimination.
Trends: In 2009, the Lilly Ledbetter Fair Pay Act was signed into law. It provides that the time an individual has to file a wage discrimination lawsuit begins each time the individual receives a paycheck, therefore allowing aggrieved individuals more time in which to file a lawsuit. This law was passed was in response to the US Supreme Court ruling in Lilly Ledbetter v. Goodyear Tire, 550 U.S. 618 (2007) which held that the time an individual has to file an equal pay lawsuit begins on the date the employer made the initial discriminatory compensation decision, not the date of the most recent paycheck. Employers also need to understand that the Lilly Ledbetter Fair Pay Act does not just apply to wage discrimination cases based on sex, but also wage discrimination based on race, age, color, national origin, and religion under Title VII as well as age under the Age Discrimination in Employment Act and disability under the Americans with Disabilities Act.
Employers also should be aware that the Paycheck Fairness Act has been introduced in the US Congress, but has failed to advance. The proposed law would provide individuals with increased damages under the EPA and include potentially unlimited back pay and punitive damage awards. It would put the burden on the employer to prove that a disparity in wages was based on a bona fide factor other than sex such as education, training, or experience, and that the other factor is job-related and consistent with business necessity. It would also make it easier to bring a class action lawsuit under the EPA and prohibit retaliation against employees for filing a claim of wage discrimination
In 2014, President Obama signed two executive measures enforcing equal pay laws and combating wage discrimination for federal contractors. Specifically, an Executive Order prohibits federal contractors from firing or discriminating against employees or job applicants who have inquired about, discussed or disclosed their own or a coworker's compensation information. In a Presidential Memorandum - Advancing Pay Equality Through Compensation Data Collection - the Department of Labor (DOL) is directed to issue regulations by August 6, 2014 requiring federal contractors to submit information about the compensation paid to employees, including data by race and sex which will be used to encourage federal contractors to comply with equal pay laws and identify and analyze industry trends while focusing on federal contractors with pay discrepancies.
Additionally, the EEOC has identified enforcing equal pay laws as a priority in its Strategic Enforcement Plan.
Author: Beth P. Zoller, JD, Legal Editor
New Hampshire recently enacted the Paycheck Fairness Act, making significant amendments to New Hampshire equal pay law.
In an effort to enforce equal pay laws and combat wage discrimination, on April 8 - National Equal Pay Day - President Obama signed two executive measures aimed at federal contractors. Based on these measures, federal contractors should review their compensation policies and practices to make sure they comply with the equal pay laws.
The Equal Employment Opportunity (EEOC) recently announced in a press release that it has settled a wage discrimination lawsuit with Extended Stay Hotels for $75,800 on behalf of a receptionist and three of her female co-workers. EEOC v. HVM L.L.C., D/B/A Extended Stay Hotels, Civil Action No. 8:13-cv-01980. The settlement confirms that the EEOC will continue to focus on equal pay and discriminatory pay practices as one of its six strategic enforcement priorities.
As recommended by the Maine Department of Labor, all Maine employers should post the Maine Equal Pay Poster.
As mandated by the Georgia Department of Labor, all employers must post the Georgia Equal Pay for Equal Work Act Poster.
As mandated by the New Jersey Department of Labor and Workforce Development, all covered employers should post the New Jersey Gender Equity Notice Poster.
Harvard professor Claudia Goldin's new paper links employee access to flexible work arrangements as the key to narrowing pay disparities among the sexes. In an address to the American Economic Association (where Goldin serves as President), the professor suggests that employers have great latitude in narrowing gender wage gaps by allowing flexible work arrangements (e.g., telecommuting, job sharing or flexible schedules) where practicable.
HR Guidance on developing policies and practices to eliminate pay discrimination.