HR Management & Compliance

Equal Pay Requirements Under the FLSA

In this new article series, we will provide a refresher on the basics of the Fair Labor Standard Act’s (FLSA’s) requirements.  In this article, we will review The Equal Pay Act (EPA), which amended the minimum wage provisions of the FLSA and is subject to enforcement under the FLSA.equal pay

The Equal Pay Act requires that men and women be given equal pay for equal work in the same establishment. The jobs need not be identical, but they must be substantially equal. It is job content, not job titles, that determines whether jobs are substantially equal. The EPA applies to exempt and nonexempt employees.

Employers may not pay 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. Each of these factors is summarized below:

  • Skill – Measured by factors such as the experience, ability, education, and training required to perform the job. The key issue is what skills are required for the job, not what skills the individual employees may have. For example, two bookkeeping jobs could be considered equal under the EPA even if one of the job holders has a master’s degree in physics, since that degree would not be required for the job.
  • Effort – The amount of physical or mental exertion needed to perform the job. For example, suppose that men and women work side by side on a line assembling machine parts. The person at the end of the line must also lift the assembled product as he or she completes the work and places it on a board. That job requires more effort than the other assembly line jobs if the extra effort of lifting the assembled product off the line is substantial and is a regular part of the job. As a result, it would not be a violation to pay that person more, regardless of whether the job is held by a man or a woman.
  • Responsibility – The degree of accountability required in performing the job. For example, a salesperson who is delegated the duty of determining whether to accept customers’ personal checks has more responsibility than other salespeople. On the other hand, a minor difference in responsibility, such as turning out the lights at the end of the day, would not justify a pay differential.
  • Working Conditions – This encompasses two factors: (1) physical surroundings like temperature, fumes, and ventilation; and (2) hazards.
  • Establishment – The prohibition against compensation discrimination under the EPA applies only to jobs within an establishment. An establishment is a distinct physical place of business rather than an entire business or enterprise consisting of several places of business. However, in some circumstances, physically separate places of business should be treated as one establishment. For example, if a central administrative unit hires employees, sets their compensation, and assigns them to work locations, the separate work sites can be considered part of one establishment.

Pay differentials are permitted when they are based on seniority, merit, quantity or quality of production, or a factor other than sex. These are known as “affirmative defenses” and it is the employer’s burden to prove that they apply.

In correcting a pay differential, no employee’s pay may be reduced. Instead, the pay of the lower paid employee(s) must be increased.

As with all Title VII discrimination complaints, an employee must first file a charge of gender-based pay discrimination with the EEOC before pursuing a civil action in court. Time limits for filing pay discrimination claims are subject to the requirements of federal law under the Lilly Ledbetter Fair Pay Act of 2009 (Ledbetter Act). The Ledbetter Act amended Title VII by making the issuing of each paycheck an unlawful discriminatory act if the paycheck resulted from a past discriminatory pay decision or practice. Under the Ledbetter Act, an unlawful employment practice occurs when:

  • A discriminatory compensation decision or other practice is adopted;
  • An individual becomes subject to a discriminatory compensation decision or practice; or
  • An individual is affected by the application of a discriminatory compensation decision or practice, including each payment of wages, benefits, or compensation that resulted, in whole or in part, from the decision or practice.

The practical effect of the Ledbetter Act is that the time period for filing a charge of discrimination begins each time an employee receives compensation or benefits (e.g., a paycheck) resulting from an employer’s past discriminatory pay practice or decision, regardless of how long ago the discriminatory practice occurred. Therefore, from the time an alleged discriminatory paycheck is received, an employee has 180 days (300 days if the charge is also covered by state or local fair employment laws) to file a Title VII pay discrimination charge with the EEOC.

Applicable law: 29 U.S.C. § 206(d)(1).

Leave a Reply

Your email address will not be published. Required fields are marked *