The Equal Pay Act prohibits discrimination in pay based on gender. Despite the law, a recent PayScale survey said women earn just 98 cents on the dollar to men when comparing men and women with the same job and qualifications.
The concern around violations of equal pay are a hot topic in 2019 and on the minds of employers.
WorldatWork, a human resources management organization, found 42% of employers surveyed in its 2019-20 salary survey planned to budget for pay equity increases in 2020.
The Equal Pay Act requires that men and women must be paid equal wages 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 U.S. Equal Employment Opportunity Commission recently announced an equal pay settlement with Wyoming-based Interim Healthcare. The EEOC said female nurses earned less than their male counterparts despite performing substantially equal work under similar working conditions.
PayScale’s analysis surprisingly found that even in industries heavily dominated by women, men still earn more than their female counterparts.
Employers should make it a priority to evaluate whether pay gaps exist. Pay gaps frequently originate at the hiring stage, where women traditionally have earned less than men and employers base the salary on the prior salary.
In other situations, women may seek less pay and employers, who would have been willing to pay more, offer what is being asked by the female candidate even though it will result in the female being paid less than her male counterparts.
Employers can, and should, differentiate pay based on skill, experience, duties, education, performance and location. A person working in Northern Virginia likely will earn more than a counterpart in Southwest Virginia based on market-driven needs.
Employers have a wide range of options in determining pay, but the most important criteria is being able to explain differentials in pay that are aligned to the employer’s compensation program.
Employers should avoid relying on an analysis that compares men and women, or minorities and non-minorities, through an uncontrolled pay gap, which measures median salary for all men and women regardless of job type, seniority, location and years of experience.
When PayScale ran this analysis, women earned just 78 cents on the dollar to men. But this comparison is not relevant to the comparison of jobs that are virtually identical, which is what the law considers.