Understanding The Equal Pay Act: Violations And Consequences

The Equal Pay Act of 1963 prohibits employers from discriminating by paying unequal wages to employees of different sexes for equal work. The Act covers all forms of compensation, including salary, overtime pay, bonuses, stock options, profit-sharing, life insurance, vacation and holiday pay, allowances, accommodations, reimbursement for travel expenses, and benefits. To avoid liability, employers must prove that wages are set according to one of four statutory defences: a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or a differential based on factors other than sex. An employee filing an Equal Pay Act claim may go directly to court within two years of the violation, or three years in the case of a willful violation.

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Paying employees of one sex less for equal work

The Equal Pay Act of 1963 prohibits employers from paying employees of one sex less for equal work. This means that men and women in the same workplace must be given equal pay for equal work. The jobs need not be identical, but they must be substantially equal in terms of skill, effort, and responsibility, and be performed under similar working conditions. All forms of pay are covered by this law, including salary, overtime pay, bonuses, life insurance, vacation and holiday pay, allowances, accommodations, reimbursement for travel expenses, and benefits.

If there is an inequality in wages between men and women, employers may not reduce the wages of either sex to equalize their pay. Instead, the higher rate paid for equal work is the standard to which the lower rate must be raised to remedy a violation of the Act. For example, if overtime premiums are paid to members of one sex, such premiums must also be paid to employees of the other sex. Similarly, if a higher minimum wage is applicable to a particular sex pursuant to state law, the employer must also pay the higher rate to employees of the opposite sex for equal work.

An employee filing an Equal Pay Act claim may go directly to court and is not required to file an Equal Employment Opportunity Commission (EEOC) charge beforehand. The time limit for filing an Equal Pay Act charge is generally within two years of the alleged unlawful compensation practice or, in the case of a willful violation, within three years. Each paycheck that reflects unequal pay is considered a violation for the purpose of calculating the deadline for filing.

An employer found in violation of the Equal Pay Act may be subject to civil penalties of no less than $100 and no more than $10,000 per violation. Additionally, it is unlawful for an employer to retaliate against an employee for taking any action to invoke or assist in the enforcement of the Equal Pay Act.

Paying employees of one sex less for substantially similar work

The Equal Pay Act of 1963 prohibits employers from paying employees of one sex less than employees of the opposite sex for equal work. The Act covers all forms of compensation, including salary, overtime pay, bonuses, stock options, profit-sharing, and bonus plans, life insurance, vacation and holiday pay, allowances, accommodations, reimbursement for travel expenses, and benefits.

The Act does not require that jobs be identical, only that they are substantially equal. This is determined by job content, not job titles, and considers whether the jobs require similar skills, effort, and responsibility and are performed under similar working conditions.

For example, if an employer pays a female worker less than a male worker for substantially similar work, and the employer cannot justify the pay difference with a valid reason, the female worker can file an equal pay claim. The same applies if an employer fails to pay a reassigned employee the higher rate associated with their new role.

In terms of compliance, employers must raise wages to equalize pay but may not reduce the wages of other employees. An employer found in violation of the Equal Pay Act may be subject to civil penalties and may also face legal action from employees.

Paying employees of one sex less for the same piece work

The Equal Pay Act of 1963 prohibits employers from paying employees of one sex less than employees of the opposite sex for equal work. This applies when the jobs in question require equal skill, effort, and responsibility and are performed under similar working conditions. The Act covers all forms of pay, including salary, overtime pay, bonuses, stock options, profit-sharing, and benefit plans.

The Act does not require that the jobs in question be identical, only that they are substantially equal. Job content, not job titles, determines whether jobs are substantially equal. For example, if a piece rate is paid to employees of one sex who are reassigned to a different role, the employer must pay employees of the opposite sex the same piece rate for that work. Failure to do so would raise questions of discrimination based on sex.

The Act also covers pension and retirement plans, making it unlawful for employers to establish different retirement ages or differentiate benefits based on sex.

It is important to note that the Equal Pay Act allows for differences in pay based on factors other than sex. These include seniority systems, merit systems, and systems that measure earnings by quantity or quality of production. Additionally, an employer may pay an employee a higher wage rate than their coworkers of the opposite sex for equal work if the higher rate is due to reasons unrelated to sex, such as a "red circle" rate for a long-serving employee who can no longer perform their regular job due to ill health.

If a violation of the Equal Pay Act is established, the lower rate must be raised to match the higher rate paid for equal work. An individual alleging a violation of the Act may go directly to court within two years of the alleged unlawful compensation practice.

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Paying higher rates for 'male jobs' than 'female jobs'

The Equal Pay Act of 1963 prohibits employers from paying wages to employees at a rate less than that paid to employees of the opposite sex for equal work. This means that men and women in the same workplace must receive equal pay for equal work. The jobs need not be identical, but they must be substantially equal, requiring equal skill, effort, and responsibility and be performed under similar working conditions. All forms of pay are covered by this law, including salary, overtime pay, bonuses, stock options, profit-sharing and bonus plans, life insurance, vacation and holiday pay, allowances, accommodations, reimbursements, and benefits.

If there is an inequality in wages between men and women, employers must raise wages to equalize pay but may not reduce the wages of other individuals. This means that if a higher minimum wage is paid to one sex because of a legal requirement, such as a state law, the higher rate must also be paid to employees of the opposite sex for equal work to comply with the EPA. For example, if overtime premiums are paid to members of one sex, they must also be paid to employees of the other sex.

Wage classification systems that designate certain jobs as "male jobs" and others as "female jobs" and specify lower rates for "female jobs" indicate a pay practice of discrimination based on sex. Such practices violate the EPA, which prohibits discrimination by employers on the basis of sex in the wages paid for equal work.

An individual alleging a violation of the EPA may go directly to court and is not required to file an EEOC charge beforehand. The time limit for filing an EPA charge in court is generally within two years of the alleged unlawful compensation practice or, in the case of a willful violation, within three years. A DOL employee who believes they have an equal pay claim should contact an Equal Employment Opportunity (EEO) counselor at the Civil Rights Center (CRC) within 45 days of the event or action they believe is discriminatory.

Using salary history to justify unequal pay

The Equal Pay Act (EPA) of 1963 prohibits employers from paying men and women different wages for the same or substantially similar work. Despite this, a persistent gender wage gap remains in America, with women earning less than their male colleagues, even at the beginning of their careers.

Some employers use salary history to determine a new hire's starting pay, either by providing a standard percentage increase over the new hire's previous salary or by directly correlating the new hire's pay to their salary history. Employers claim that they need to know the salary history of applicants to determine the market value of an applicant or the position. However, salary is not a neutral, objective factor. It often reflects historical market forces that value the equal work of one sex over the other. Salary history is also an imperfect proxy for an applicant's value or interest in a position. For example, relying on salary history can lead to depressed wages for individuals who have previously worked in the public sector or in non-profits and are moving into the private sector.

The Ninth Circuit Court of Appeals ruled that an employer cannot justify a pay difference between male and female employees performing equal work based on prior salary. The Court wrote that prior salary is not a legitimate measure of work experience, ability, performance, or any other job-related quality, and that employers must look directly to those underlying factors rather than prior salary when justifying a wage differential. The Court specifically stated that "prior salary alone or in combination with other factors cannot justify a wage differential" because prior salary history does not constitute a "factor other than sex" under the EPA's statutory "catchall" exception.

Some courts have broken with the EEOC's position on salary history, and have permitted employers to rely on employees' salary history to justify paying women less for the same work. This mix of court decisions makes it important to enact legislation clearly banning the harmful use of salary history in the hiring process. Employers are advised to take preventative steps to minimize the risk of pay disparity, such as ensuring whether state law permits obtaining salary history at all, predetermining salaries or salary ranges for open positions, and clarifying what sex-neutral factors may lead a selected candidate to be on the high or low end of the salary range.

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