March 12, 2024, marked Equal Pay Day across the country – a symbolic day dedicated to raising awareness on the historic gender wage gap. According to the National Committee on Pay Equity, “this date symbolizes how far into the year women must work to earn what men earned in the previous year.”
According to recent statistics published by the Census Bureau, women working full-time, year-round only earn 84 cents on every dollar that men earn. This is a slight increase from the 83.7 cents figure published last year. The National Women’s Law Center found that, based on today’s figures, a woman just beginning her career will experience a lifetime wage gap of $399,600. For Black and Latina women, the disparity increases significantly to lifetime wage gaps of $884,800 and $1,218,000, respectively. Surprisingly, the wage gap issue doesn’t dissipate with an increase in educational attainment. In analyzing the Census Bureau Data, the National Partnership for Women & Families found that women with master’s degrees only earn 72 cents for every dollar earned by men with the same degree, and even earn less than men with bachelor’s degrees.
Equal Pay Day serves as a good reminder for employers to review their obligations under Title VII, a federal law that prohibits discrimination on the basis of sex (including gender, gender identity, and sexual orientation), as well as the Equal Pay Act (“EPA”). The EPA is a federal law that prohibits sex-based discrimination in compensation. The law requires employers to pay male and female employees equal wages for equal work. Under the EPA, the term “wages” is construed broadly and encompasses all forms of compensation or payments, including any fringe benefits, such as medical, hospital, accident and life insurance, and retirement benefits. “Equal work” does not mean identical but is instead defined as work that is equal in skill, effort, and responsibility. Importantly, job titles are not dispositive. Finally, EPA regulations define an establishment as a distinct physical place of business, rather than an enterprise that is comprised of entirely independent locales.
Proactive employers should audit comparable employee salaries to verify that male and female employees are receiving equal wages for equal work in compliance with Title VII and the EPA. If discrepancies in pay are discovered between employees of different sexes, to be lawful, employers must be able to articulate a legitimate business justification for the discrepancies. Such legitimate business justifications could include identifiable variations in seniority, experience, training, education, and/or production levels between different employees.
Clear compensation policies with set criteria and qualifications for wages and wage increases can help minimize an organization’s exposure to equal pay claims.
