Equal Pay Day was recognized earlier this month.
This day — April 10 — is purported to identify the amount of time women have to work (into the fourth month of the year) before they catch up to the median pay of men from the prior year.
The continuation of differential in pay between men and women comes nearly 55 years after the passage of the Equal Pay Act.
“No employer … shall discriminate … between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex,” the law states.
Despite this law, there remain many examples where women are paid less than their male counterparts.
The day before Equal Pay Day this year, the 9th U.S. Circuit Court of Appeals reversed its prior decision regarding the Equal Pay Act in Rizo vs. Yovino. The case was heard before an 11-judge panel, which ruled that an employer cannot justify a wage differential between male and female employees by relying on prior salary.
In the case, a female teacher sued her employer when she learned she earned less than comparable male employees for the same work.
Rizo’s employer claimed that it relied on her prior salary in setting pay, a system it claimed was a factor other than sex, thus nondiscriminatory.
Initially, a three-judge panel of the 9th Circuit agreed with the school system and ruled that prior salary could be used to justify a pay differential. However, upon review by the entire panel of 9th Circuit judges, the court reversed the prior decision.
The full court concluded that any “factor other than sex” is limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance.
Three of the 11 judges separately concurred, while agreeing with the ultimate ruling. All three disagreed that prior salary cannot be considered in any way in setting pay.
Some states have passed legislation to prohibit employers from asking about current or prior pay in the application process, but Virginia is not one of those jurisdictions.
Recently the Equal Employment Opportunity Commission announced that a Virginia janitorial services company paid more than $35,000 to settle an EEOC lawsuit alleging that it paid a female porter a lower wage than her male counterpart.
The suit further alleged that the company retaliated against her after she raised concern over the pay discrepancy by assigning her more work, harassing her, and then firing her.
Employers should evaluate their compensation practices and determine if they can justify pay discrepancies.
Documented performance or production differentiators as well as experience, skill and education are all appropriate factors.
Employers should not assume that legitimate factors exist, and should document reasons for pay discrepancies where they exist, and be sure that those reasons justify the pay differential.