Equal Pay for Equal Work

Equal Pay

Compensation Discrimination

Reprinted from the US Equal Employment Opportunity Commission (EEOC)

The right of employees to be free from discrimination in their compensation is protected under several federal laws, including the following enforced by the U.S. Equal Employment Opportunity Commission (EEOC): theEqual Pay Act of 1963,Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, and Title I of the Americans with Disabilities Act of 1990.

The Equal Pay Act requires that men and women be given equal pay for equal work in thesame establishment. The jobs need not be identical, but they must be substantially equal. Itis job content, not job titles, that determines whether jobs are substantially equal. Specifically, the EPA provides:

Employers may not pay unequal wages to men and women who perform jobs that requiresubstantially equal skill, effort and responsibility, and that are performed under similarworking conditions within the same establishment. Each of these factors is summarizedbelow:

• Skill - Measured by factors such as the experience, ability, education, and training requiredto perform the job. The key issue is what skills are required for the job, not what skills theindividual employees may have. For example, two bookkeeping jobs could be consideredequal under the EPA even if one of the job holders has a master's degree in physics, sincethat degree would not be required for the job.


• Effort - The amount of physical or mental exertion needed to perform the job. For example,suppose that men and women work side by side on a line assembling machine parts. Theperson at the end of the line must also lift the assembled product as he or she completes thework and place it on a board. That job requires more effort than the other assembly line jobsif the extra effort of lifting the assembled product off the line is substantial and is a regularpart of the job. As a result, it would not be a violation to pay that person more, regardless ofwhether the job is held by a man or a woman.


• Responsibility - The degree of accountability required in performing the job. For example, asalesperson who is delegated the duty of determining whether to accept customers' personalchecks has more responsibility than other salespeople. On the other hand, a minor difference in responsibility, such as turning out the lights at the end of the day, would not justify a pay differential.


• Working Conditions - This encompasses two factors: (1) physical surroundings liketemperature, fumes, and ventilation; and (2) hazards.


• Establishment - The prohibition against compensation discrimination under the EPA appliesonly to jobs within an establishment. An establishment is a distinct physical place ofbusiness rather than an entire business or enterprise consisting of several places of business. However, in some circumstances, physically separate places of business should be treated asone establishment. For example, if a central administrative unit hires employees, sets theircompensation, and assigns them to work locations, the separate work sites can be consideredpart of one establishment.

Pay differentials are permitted when they are based on seniority, merit, quantity or quality ofproduction, or a factor other than sex. These are known as "affirmative defenses" and it isthe employer's burden to prove that they apply.

In correcting a pay differential, no employee's pay may be reduced. Instead, the pay of thelower paid employee(s) must be increased.

Title VII, ADEA, and ADA

Title VII, the ADEA, and the ADA prohibit compensation discrimination on the basis of race,color, religion, sex, national origin, age, or disability. Unlike the EPA, there is no requirementunder Title VII, the ADEA, or the ADA that the claimant's job be substantially equal to thatof a higher paid person outside the claimant's protected class, nor do these statutes require theclaimant to work in the same establishment as a comparator.

Compensation discrimination under Title VII, the ADEA, or the ADA can occur in a varietyof forms. For example:

• An employer pays an employee with a disability less than similarly situated employees without disabilities and the employer's explanation (if any) does not satisfactorily account for the differential.
  


• A discriminatory compensation system has been discontinued but still has lingering discriminatory effects on present salaries. For example, if an employer has a compensation policy or practice that pays Hispanics lower salaries than other employees, the employer must not only adopt a new non-discriminatory compensation policy, it also must affirmatively eradicate salary disparities that began prior to the adoption of the new policy and make the victims whole.
  


• An employer sets the compensation for jobs predominately held by, for example, women or African-Americans below that suggested by the employer's job evaluation study, while the pay for jobs predominately held by men or whites is consistent with the level suggested by the job evaluation study.
  


• An employer maintains a neutral compensation policy or practice that has an adverse impact on employees in a protected class and cannot be justified as job-related and consistent with business necessity. For example, if an employer provides extra compensation to employees who are the "head of household," i.e., married with dependents and the primary financial contributor to the household, the practice may have an unlawful disparate impact on women.

It is also unlawful to retaliate against an individual foropposing employment practices that discriminate based on compensation or forfiling a discrimination charge, testifying, or participatingin any way in an investigation, proceeding, or litigation under Title VII, ADEA, ADAor the Equal Pay Act.

Statistics

In Fiscal Year 2003, EEOC received 1,167 charges of compensation discrimination discrimination. EEOC resolved 1,071 compensation discrimination charges in FY 2003 and recovered $3.4 million in monetary benefits for charging parties and other aggrieved individuals (not including monetary benefits obtained through litigation).

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