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Employment Law Basics Part 6 – Equal Compensation Discrimination

In the sixth and final part of this blog series, we will discuss discrimination in the workplace involving equality in compensation. While there is one primary federal law that addresses equal compensation, the majority of anti-discrimination laws also protect against inequality in pay based on various protected categories. If you have any specific questions about your pay and whether it is fair, do not hesitate to contact us.

What Protections Are Provided by the Equal Pay Act?

The federal statute that deals entirely with equality in workplace compensation is the Equal Pay Act. Under this statute, men and women who work in the same workplace performing substantially equal work must be given equal pay compensation. This requirement is often referred to as “equal pay for equal work.” While the jobs being compared need not be identical, they must be “substantially equal.” This is an issue that is typically highly contested in litigation. When it comes to comparing job duties, the job title is not controlling. Instead, it is the actual job content or the tasks or responsibilities involved.

How Do You Compare Jobs in EPA Claims?

There are specific guidelines for determining whether an aggrieved employee and her comparator were performing sufficiently similar jobs. To sum it up, employers are prohibited from paying 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.” Here is what that means.

Factors Relating to the Employee

Skill is measured by the experience, ability, education, and training required to perform a particular job. It is important to point out that the determining factor is not which skills the employees may have but the skills that are actually required for the job.

Effort refers to the amount of physical or mental exertion required to perform a particular job. An employer is allowed to pay one employee more if his or her job requires more physical or mental effort to perform, regardless of that person’s gender. Responsibility is defined as the level of accountability required to perform a job, but that responsibility must be substantial enough to justify a difference in pay.

Factors Relating to the Workplace

The term “working conditions” means both the physical surroundings in the workplace and real or potential hazards that exist. Physical surroundings refers to things like temperature, ventilation, and fumes. Comparable employees must work in the same “establishment” which means the same distinct physical place of business. It does not mean the entire business which consists of more than one place of business. Just remember that separate worksites are not part of the same establishment.

Are Any Pay Differentials Legally Allowed?

There are situations where a difference in pay is allowed and those situations are often used by employers as affirmative defenses to an equal pay action. For example, pay differentials are allowed when they are based on merit, seniority, or quantifiable factors such as quantity or quality of production. As long as the factor used to determine a difference in pay is based on a factor other than gender, it could potentially be legal.

Are Salaries and Wages the only Things Protected?

Salary and hourly wages are not the only types of compensation that are protected under the Equal Pay Act. All types of compensation are covered, including overtime pay, stock options, profit sharing, and bonuses. It also covers benefits such as life insurance, vacation and holiday pay, gas allowances, hotel accommodations, and reimbursement for certain expenses. When there are disparities in pay between men and women, the solution is not for employers to reduce the wages of either in order to achieve equal pay.

What are the Other Statutes that Protect Against Unequal Pay?

The Equal Pay Act is not the only federal protection out there for employees. Title VII also covers discrimination based on sex (gender) and other protected categories when it involves compensation and benefits. The Age Discrimination in Employment Act (ADEA) and the Americans with Disabilities Act (ADA) also prohibit compensation discrimination on the basis of age or disability. One major difference in unequal pay claims brought under the EPA and claims brought under one of these other statues is that they do not require the jobs of the employees being compared to be substantially equal, as required under the EPA.

If you feel you have been the victim of discrimination or retaliation in the workplace, or if you have any other questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Wrady & Michel, LLC. You can contact us either online or by calling us at (205) 319-9724. We are here to serve you!