Fair Pay

Editor's Note: Understand how to avoid wage discrimination in employment.

Beth P. ZollerOverview: 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 was introduced in the US Congress, but 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

Author: Beth P. Zoller, JD, Legal Editor

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