Equal Pay

In recent years, enforcement agencies and employers have grown increasingly concerned with equal pay issues. Women and people of color still experience wage discrimination in the workforce, and employees are demanding more transparency from their employers about pay discrepancies, benefits, and opportunities. Several high-profile pay equity lawsuits have drawn attention to the issue, and a 2022 study estimates that more than half of American employers plan to audit or address the status of equal pay at their companies within the next year. The effort spent scrutinizing equal pay statistics is worth the effort in the long run. Even in instances in which a company’s equity numbers need improvement, the act of addressing the issue and taking steps forward goes a long way toward establishing and bolstering trust with employees.

Equal Pay Defined

Wage discrimination claims based on gender may be filed under federal or state law. The federal Equal Pay Act (“EPA”) requires that workers receive equal pay for equal labor, regardless of the circumstances of an employee’s age, race, gender, disability, national orientation, or sexual orientation. Some states have passed or strengthened equity pay legislation to include work that is “substantially similar,” rather than identical. Generally, job titles do not need to be identical to be comparable; rather, equal pay laws consider the content of the job and not its designation. The equal pay provision applies to all forms of compensation and is not limited to salary. Other forms of compensation, including bonuses, stock options, profit sharing, insurance benefits, vacation time, and others are subject to pay equity laws. When an inequality in compensation is identified, employers cannot address the problem by reducing the wages of either subject employee. Title VII of the Civil Rights Act also makes sex discrimination illegal, and employees with Equal Pay Act claims may also have a claim under Title VII.

The California Equal Pay Act (CEPA) requires complaining employees to demonstrate that they are paid less than an employee or employees of the opposite sex, or another race or ethnicity, who is performing substantially similar work. Employers facing pay equity claims may demonstrate legitimate reasons for pay discrepancies. For example, differences in education, experience, skills, location, performance, and tenure may be considered as legitimate reasons for pay discrepancies.

Though most states have equal pay protections in some form, these protections historically have not always been effective in preventing discriminatory pay in all companies and organizations. Newer legislation includes salary posting requirements and a prohibition of reviewing an applicant’s prior salary or using it to set their pay, in order to avoid perpetuating salary gaps, are becoming more popular as the issue has received more attention in recent years.

Equal Pay: How We Can Help

The employment attorneys at Payne & Fears partner with clients negotiating the contemporary equal pay legal landscape. Our attorneys have decades of experience learning the particulars of federal and state equal pay legislation and stay abreast of changing regulations. Not only do we help clients assess the reality of pay equity in their firms, but we can also reduce clients’ exposure to potential claims by scrutinizing corporate policies, job applications, and other essential documents to ensure pay equity compliance. We believe the prevention of disputes is preferable to litigation. That said, when equal pay claims arise, we draw upon our substantial employment law litigation experience and never shy away from a fight.

Payne & Fears helps employers from several sectors with equal pay compliance and litigation. Whether our clients seek compliance counsel or representation in an equal pay litigation, we deploy our familiarity with decades of changes to employment case law to our clients’ best interests. Though we also seek to avoid the expense and complications of protracted litigation, we are always ready to defend clients in equal pay disputes of any size.