On June 10, 1963, President John F. Kennedy signed into law the Equal Pay Act (EPA), an amendment to the Fair Labor Standards Act which “prohibits the arbitrary discrimination against women in the payment of wages.” This historical piece of federal anti-discrimination law was one of the very first to address gender-based pay disparities when at the time of its passing, women earned 58.9 percent of what men earned and that percentage was on a downward trend.
In the passing of the bill, Congress stated that sex discrimination: “depresses wages and living standards for employees necessary for their health and efficiency, prevents the maximum utilization of the available labor resources, tends to cause labor disputes, thereby burdening, affecting, and obstructing commerce, burdens commerce and the free flow of goods in commerce, and constitutes an unfair method of competition.”
Enforced by the Equal Employment Opportunity Commission (EEOC), the EPA prohibits pay discrimination based on gender between employees who are performing the same job at the same location, requiring men and women to be given equal pay for equal work, and includes all forms of compensation: salary, bonuses, vacation and holiday pay, and other benefits. The jobs need not be identical, but they must be substantially equal with job duties closely related. It is job content, not job titles, that makes that determination.
The EPA also stipulates that when employers are required to correct a discriminatory difference in pay, they cannot reduce a higher earner’s wages; instead, they must increase the lower earner’s wages. So, how does an employer take proactive steps to ensure they maintain consistent compliance with the EPA? A few suggestions include:
- Review Job Descriptions: Employers should regularly review job descriptions to ensure that the description accurately reflects the overall job content. Though titles, classifications, or job descriptions do not definitively define whether employees are performing substantially similar work, it does provide a helpful basis for comparison.
- Conduct an Audit: In addition to job descriptions, employers should review wages to identify any significant disparities in compensation amongst employees who perform similar work.
- Educate Staff: Managers and supervisors who make wage recommendations need to understand the law and what factors are legally allowed to be a part of their decision-making. Regularly train your management team so they are aware of all current state and federal laws.
- Access & Documentation: Make sure you have access to reliable compensation information and regularly review that data. At the same time, document all compensation decisions, identifying the reason for any adjustments, as well as factors related to the difference in wages between employees such as education, experience, etc.
- Do Not Retaliate: The EPA makes it illegal to retaliate against anyone for opposing practices that discriminate based on wages, filing a charge of discrimination, or participating in any way in an EPA investigation.
Exceptions & Claims
There are, however, exceptions to the Equal Pay Act, with certain differences in pay not amounting to wage discrimination. Pay differentials are permitted when they are based on seniority, merit, quantity or quality of production, or a factor other than sex.
These are known as “affirmative defenses,” and it is the employer’s responsibility to prove that they apply. There are also several factors that must be met to substantiate an Equal Pay Act claim, including that the jobs being compared must require substantially equal skill, effort, responsibility, and within the same establishment, with an establishment being defined as a distinct physical place of business rather than an entire business or enterprise consisting of several places of business.
The Equal Pay Act was a victory for women, however, according to Bureau of Labor Statistics data, in 2020 women still earn only 82 cents for every dollar a man earns, and the gap is even wider for many women of color.
There is still a way to go before we establish true gender equality, however, ensuring your business’ compliance is an impactful and proactive step in the right direction. Accurate Background is proud to support the anniversary of the EPA, and equal pay for equal work regardless of gender or gender identity, color, age, religion, or nation of origin, and will continue to support all laws that help eradicate any form of workplace discrimination.