As pay equity and transparency laws continue to spread across the country, the Equal Employment Opportunity Commission (EEOC) reminds us that both women and men can be subject to discriminatory pay practices based on gender.
On January 23, 2024, the EEOC announced a $40,000 settlement with the Maryland Department of Transportation on behalf of a male employee who claimed he was paid less than similarly situated female employees, despite having more experience and tenure. According to the complaint, the male employee was paid less than the female employees who succeeded him in his role as Community Relations Manager for District 5, as well as female employees who held the same role in other districts across the state.
The Equal Pay Act of 1963 (EPA) mandates that employers compensate men and women equally for performing substantially equal jobs. This does not require that the jobs be identical, but rather that the jobs being compared require substantially equal skill, effort, and responsibility and be performed under similar working conditions within the same establishment. However, the EPA has carved out an exception providing that employees performing the same work may be compensated differently if the discrepancy is due to one of the following: (1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) any factor other than sex. To use the “any factor other than sex” defense, some circuits have held that the employer must show the pay difference was job-related and adopted for legitimate business reason, while other circuits have considered this defense as a catch-all, relying on nearly any factor other than the employee’s sex.
In its press release, the EEOC acknowledged that pay disparities most often affect women in the workplace, but the law applies to men as well. The EEOC goes so far as to suggest that the right to equal pay extends even beyond the protected categories of race and gender under the EPA, noting that, “fundamental fairness dictates that employees receive equal pay for equal work.”
Absent a completely homogenous workforce, every employer is at risk of having someone who is paid less than someone else for doing the same work, likely triggering an EPA violation unless one or more of the safe harbor exceptions is applicable. Further, more than 40 states now have their own equal pay statutes, many of which are even more employee favorable than the EPA.
What should employers do? Employers need to train anyone whose role involves or affects the setting of employee salaries on the risks of discrimination with respect to wages. The training should include state-specific law on equal pay as well as what the relevant circuit court has held as to what factors can be relied on when using the “any factor other than sex.” Additionally, employers should routinely audit pay practices. The goal is to proactively catch and correct any unequal pay practices. When doing so, employers should hire counsel so that the findings and discussions about necessary corrections are protected by attorney-client privilege. In some instances, employers may want to take the next step and conduct a subsequent audit that is not privileged and can be used as a defense to future legal claims.
[View source.]
