By Megan Walker, Fisher Phillips
The Federal Equal Pay Act was signed into law by President John F. Kennedy in 1963. Fifty-three years later, lawmakers across the U.S. are still searching for ways to narrow the pay gap between men and women.
The Foundation: The Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964
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Generally, there have been two main federal laws that prohibit pay discrimination for the last half-century: The Equal Pay Act and Title VII of the Civil Rights Act (Title VII).
The Equal Pay Act amended the Fair Labor Standards Act (FLSA) and prohibits pay discrimination on the basis of sex. Specifically, employers are not permitted to pay wages to an employee of the opposite sex for “equal work” except where the pay differential is made pursuant to (1) a seniority system; (2) a merit system; (3) a system measuring earnings by quantity or quality of production; or (4) a differential based on any other factor other than sex. However, it also provides that employers may not reduce any employee’s wages in order to comply with the law.
Title VII more broadly makes it unlawful for an employer to discriminate against an individual “with respect to his compensation, terms, conditions, or privileges of employment” because of sex, race, color, national origin, or religion.
The Lilly Ledbetter Fair Pay Act of 2009
The latest change to federal pay discrimination law came as the first piece of legislation signed by President Obama in January 2009. In the case Ledbetter v. Goodyear Tire & Rubber Co., the Supreme Court had found that a female employee could not bring a pay discrimination lawsuit because the decisions that led to the purported pay discrimination happened more than 180 days before she complained to the Equal Employment Opportunity Commission (EEOC).
In response to this decision, Congress passed the Lilly Ledbetter Fair Pay Act. The act enables employees to bring pay discrimination claims based on any pay check in the statute of limitations period that is affected by a discriminatory act. In other words, if an employee’s pay today is lower because of illegal discrimination that occurred a decade ago, that employee may still have a timely claim against the company.
New provisions in California and Massachusetts
Dissatisfied with existing equal pay laws, California and Massachusetts both recently enacted laws reframing equal pay.
Equal pay for “substantially similar” work. The new laws in California and Massachusetts redefine when equal pay is due. Rather than “equal pay for equal work,” these two new state statutes require equal pay for “substantially similar” work. The rationale behind this change is that it would prevent employers from differentiating, for example, between male janitors and female housekeepers.
Wage transparency. California and Massachusetts protect employees who discuss wages with others or ask questions about other employees’ wages. However, neither state requires an employer disclose wage information about other employees.
Shifting the burden. Employers in California now have the burden to prove that any wage gap is justified by seniority, merit, production, or another bona fide factor. Previously, the employee had to disprove these reasons.
Salary history not an excuse. In Massachusetts, employers may not use an employee’s previous wage or salary history as a defense to an equal pay action. In other words, if two candidates of different sexes are hired for substantially similar positions but one is paid more than the other purely because he was paid more in his prior position, the employer is in violation of the law. Not to be outdone, California has proposed an identical provision for its law.
Equal pay regardless of race or ethnicity. Currently, equal pay laws seek to close the wage gap based on sex or gender, leaving other protected categories to seek analogous claims only under broader antidiscrimination laws (like Title VII). In California, the state legislature has voted to amend its equal pay law to also address wage gaps based on race or ethnicity.
In sum
While equal pay laws have been around for the better part of a century, this is an area of law where activists are gaining ground quickly. While California and Massachusetts are only two states, the laws passed there will likely serve as models for other states and could also influence new federal legislation. Employers must be prepared to examine and evaluate their pay practices in order to readily adapt and protect against pay discrimination claims.
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Megan Walker is an associate in Fisher Phillips’s San Diego office. Her practice includes counseling and defending employers in all areas of employment law. A storyteller with a mind for numbers, Megan excels at both liability analysis and client advocacy. She has helped numerous clients craft employment policies that both comply with the law and fit with their business’s needs. She has also represented employers in lawsuits alleging wage and hour violations as both individual actions and class and collective actions.