WAGE DISCRIMINATION UNDER THE EQUAL PAY ACT AND TITLE VII

Size: px
Start display at page:

Download "WAGE DISCRIMINATION UNDER THE EQUAL PAY ACT AND TITLE VII"

Transcription

1 WAGE DISCRIMINATION UNDER THE EQUAL PAY ACT AND TITLE VII EQUAL PAY ACT The Equal Pay Act requires that men and women be given equal pay for equal work. The jobs need not be identical, but they must be substantially equal. It is job content, not job titles, that determines whether jobs are substantially equal. The EPA applies to all forms of compensation, including bonuses; vacation or holiday pay, fringe benefits, stock options, and profit sharing. Specifically, the EPA provides: 1. Equal Pay Act Requirements a. Employers may not pay unequal wages to men and women who perform jobs that require substantially equal skill, effort and responsibility and that are performed under similar working conditions within the same establishment. Each of these factors is summarized below. Skill The key issue is what skills are required for the job, not what skills the individual employees may have. For example, two bookkeeping jobs could be considered equal under the EPA even if one of the job holders has a master s degree in physics, since that degree would not be required for the job. L - 1

2 Effort For example, suppose that men and women work side by side on a line assembling machine parts. The man at the end of the line, after completing his part, must also lift the 40 pound assembled product and place it on a board. That man s job involves more effort than the other assembly line jobs if the extra effort of lifting the assembled product off the line is substantial and is a regular part of the job. Responsibility For example, a salesperson who is delegated the duty of determining whether to accept customers personal checks has more responsibility than other salespeople. On the other hand, a minor difference in responsibility, such as assignment of the task of locking up at the end of the day, would not justify a pay differential. Working Conditions This involves two factors: (1) physical surroundings like temperature, fumes and ventilation and (2) hazards. For example, employees who work with toxic materials may earn more than those who work with safe materials. Same Establishment The EPA s requirements only apply to men and women performing equal work within the same establishment. An establishment generally refers to a physically separate place of business. On the other hand, two or more physically separate portions of a business should be considered one establishment if personnel and pay decisions are determined L - 2

3 centrally and the operations of the separate units are interconnected. b. In correcting a wage differential, no employee s wage rate may be reduced So if you discover that you are giving higher pay to men than to women who are performing substantially equal jobs, you must raise the women s wages, not lower the men s pay. Suppose that two jobs are substantially equal. Can an employer justify paying a man and a woman different wages for those jobs? The circumstances that permit wage differentials are discussed below. 2. Defenses under the Equal Pay Act Wage differentials are permitted when they are based on: a. Seniority The wage differential can be based on a bona fide seniority system. To be bona fide, it must be an established seniority system that is communicated to employees and consistently applied, and it must not have been adopted with a discriminatory purpose. L - 3

4 b. Merit A wage differential can be based on a merit system which is communicated to employees and consistently applied. A merit system rewards employees based upon their job performance, such as efficiency, quality and ability. The merit system should be based on objective performance rather than subjective criteria. The more subjective the criteria, the more scrutiny that is applied. Thus, in one case a bank was unable to rely on its purported merit system to justify different pay for male and female tellers where the primary consideration in pay decisions was a high official s gut feeling about each employee. c. Quantity or quality of production For example, if sales people are paid a commission for each item sold, and if males tend to receive a greater total salary than females due to their greater volume of sales, there will be no violation of the EPA. d. Any other factor other than sex For example, an employee s job-related education, experience or training may justify a wage differential. Thus, a male physics professor with a Ph.D. in physics could be paid more than a female physics professor with just a masters degree. Another example of a factor other than sex is red circled rates. Thus, if an employee is moved from machinist work to clerical because of his failing health, you can keep paying him his higher salary without having to raise the pay of all female clerical employees. L - 4

5 3. Remedies for Equal Pay Act Violations a. Injunctive relief b. Backpay Individuals can recover back wages due for up to two years prior to the filing of an EPA lawsuit or, if the employer s violation was willful, up to three years. c. Liquidated damages Liquidated damages are equal to the amount of lost wages. So EPA complainants can receive double back pay. But if the employer can show that it acted in good faith and with reasonable grounds to believe that it was not violating the law, it can avoid liability for liquidated damages. d. Attorney s fees WAGE DISCRIMINATION UNDER TITLE VII Title VII prohibits wage discrimination on the basis of race, color, religion, sex or national origin. The basic theories of disparate treatment and adverse impact apply to wage discrimination claims under Title VII. EPA-type complaints can always also be brought under Title VII. However, Title VII s prohibition against wage discrimination is broader. For example, in one Supreme Court case [County of Washington v. Gunther, 452 U.S. 161 (1981)], a county had conducted a survey of outside markets and the worth of jail guard jobs, and then raised the salaries of its male guards who worked in the male section of the jail, but failed to raise the salaries of the female guards in the female section of the jail. An Equal Pay Act claim failed because it was determined that the male and female guard jobs were not L - 5

6 substantially equal in that the male guards supervised more than ten times as many prisoners as the female guards. Nevertheless, the female guards were able to prove a violation of Title VII by establishing that their wages were depressed due to sex discrimination. The county violated Title VII when it paid the male guards the full amount recommended by a County evaluation, while paying the female guards less than what was recommended in the same evaluation. L - 6