How do we determine whether men and women are doing similar jobs for purposes of Equal Pay Act compliance?
Quick Answer
The federal Equal Pay Act requires men and women to be paid equally if they perform substantially similar work. “Substantially similar” means substantially equal concerning the skill, effort, responsibility and working conditions applicable to jobs in the same establishment.
Legal Perspective
Kollman & Saucier
Timonium, Maryland
Review what employees do in the jobs they are performing, says author and employment law attorney Darrell VanDeusen of the firm Kollman & Saucier.
Does it appear that there are “male” jobs and “female” jobs that are essentially the same, but with a different pay scale? In the 21st century, this is far less likely than it was in the mid-20th century, as very few employers have that sort of segregated workforce.
The EPA, enacted in 1963, predated Title VII sex discrimination pay claims and has a different standard for assessing whether two jobs are the “same” for pay purposes. The jobs need not be identical, but they must be substantially equal. The EPA is now infrequently used as a vehicle to address alleged pay discrimination based on sex because its available damages are significantly less than those available under Title VII.
There is a multi-part test to determine whether two jobs are “similar” for compensation purposes (note that job titles do not matter here): They (1) must be in the same establishment; (2) where men and women are paid different “wage rates;” (3) for jobs that require equal “skill, effort and responsibility.”
There are four defenses to an EPA claim. There is no violation if the difference in wages is because of (i) a seniority system; (ii) a merit system; (iii) a system that measures earnings by quantity or quality of production; or (iv) a differential based on “factors other than sex.”
Relevant Case Law
Schleicher v. Preferred Solutions Inc.
Riser v. QEP Energy
Knox v. John Varvatos Enterprises, Inc.
HR Insight
US Real Estate Services Inc.
Foothill Ranch, California
Have a system where the position has a salary range for the job itself, says HR Manager Sallie Hansen. Identify the:
- Minimum of the range for less experience or education
- Mid-range for some experience and meeting education, and
- Higher end of the range for many years of experience and education.
Doing so should mean any employee in the role, regardless of gender, is paid according to the job duties and level in the company. Experience, education, length of time on the job and performance are factors that can be objectively reviewed and monetized fairly.
Helicopters Inc.
Cahokia, Illinois
We look at the content of the job and not the title, says HR Director Jack Donnelly. The jobs do not have to be identical, but substantially equal. Review compensation regularly and disclose the salary range in job postings to protect against salary inequality.
Miller's Health Systems
Warsaw, Indiana
You must compare seniority, the presence (or lack thereof) of specialized training for the job, and any shift-pay differentials, then break down job tasks to determine the fairness of pay, says VP of HR Jennifer Gappa.
The Cost of Noncompliance
Equal pay lawsuit: Female business analyst paid $50K over wage discrepancy
Who was involved: Bryce Corporation, a flexible packaging manufacturer, and a female senior business analyst who worked at a facility in Memphis, Tennessee.
What happened: The EEOC filed an equal pay complaint, alleging the company paid the woman $18,000 less per year than it paid a similarly situated male employee. When the woman learned of the pay discrepancy and asked for equal pay, the company refused to increase her pay.
Result: The company paid $50,000 to the affected employee. Under the agreement, it was also required to:
- Ensure compliance in the future that employees receive equal pay for equal work when the job performance “requires equal skill, effort and responsibility and which are performed under similar working conditions.”
- Provide training on the Equal Pay Act and Title VII to employees who interview applicants and/or make hiring decisions.
- Post a notice for two years that states the company will not take action against any employees because they opposed employment practices that violated the Equal Pay Act and Title VII.
Info: Bryce Corporation to Pay $50,000 to Settle EEOC Equal Pay Lawsuit, 9/30/20.
Dell pays $75K to settle female IT analyst’s wage discrimination lawsuit
Who was involved: Dell, Inc. and a female information technology analyst in Texas.
What happened: The EEOC sued Dell on the employee’s behalf, alleging the company paid her $17,510 less than a male counterpart performing work requiring substantially the same skill, effort and responsibility.
Result: In addition to paying $75,000 to the woman, Dell agreed to:
- Provide specialized training on the Equal Pay Act (EPA) and Title VII.
- Post a notice of employee rights under the EPA and Title VII.
- Report info regarding employee reports of discrimination to the EEOC for two years.
Info: Dell to Pay $75,000 to Settle EEOC Equal Pay Lawsuit, 9/7/21.
Hotel operators pay $400K to settle pay discrimination lawsuit
Who was involved: Aimbridge Hospitality, LLC and AH 2007 Management, LP – the former joint operators of a Courtyard by Marriott hotel located in Louisiana and three employees.
What happened: The operators paid a male worker 38% more than his female supervisor and at least 60% more than his female co-workers, the EEOC’s lawsuit alleged. When confronted with the pay discrepancies, the operators raised the female supervisor’s salary. But they also illegally lowered the man’s pay rather than provide pay raises to the female co-workers, according to the complaint.
Result: The operators paid $400,000 for back pay and damages, which was split between the female supervisor, the female co-workers and the male worker whose pay was decreased. Under the consent decree, the operators were also required to:
- Conduct periodic training on pay discrimination.
- Maintain anti-discrimination policies and records.
- Retain an economist to conduct periodic pay equity studies.
- Post anti-discrimination notices.
- Provide periodic compliance reports to the EEOC.
Info: Aimbridge Hospitality and AH 2007 Management to Pay $400,000 to Settle EEOC Pay Discrimination Lawsuit, 2/3/21.
Key Takeaways
- The Equal Pay Act applies when jobs involve similar tasks, levels of skill, levels of exertion, working conditions and levels of responsibility.
- For the Equal Pay Act to apply, the jobs do not need to be identical to one another.
- Although the jobs generally must be performed in the same physical place, workers at different sites may be compared if the same managers oversee both sites and workers move between both locations.
- Workers of different sexes performing the same job may be paid differently without violating the Equal Pay Act if the pay difference is based on a factor other than sex, such as seniority, merit or an incentive system.
- To correct an improperly sex-based pay differential, the pay of the lower-paid employee must be raised; the pay of the higher-paid employee may not be reduced.