United States: Conditions Are Ripe For Equal Pay And Pay Discrimination Claims

In late September 2015, the National Partnership for Women and Families released a report based on U.S. Census Bureau data demonstrating that the wage gap between men and affects women in every industry in every state.

The report demonstrates that nationally, on average, a woman who holds a full-time, year-round job is paid $39,621 per year while a man who holds a full-time, year-round job is paid $50,383 per year. Overall in the United States, women are paid 79 cents for every dollar paid to men. The wage gap is greater for women of color: for every dollar paid to white, non-Hispanic men, African-American women receive 60 cents and Latinas receive 55 cents.

The report released results by state showing the gap between men and women by cents per dollar. For example, even looking at only those states in which GSH has offices, the data reveals varying wage gaps:

The report found that the wage gap cannot be explained by personal choices, meaning it persists regardless of industry. For example, female sales professionals are paid 62 cents for every dollar paid to men, and in production females are paid 66 cents for every dollar paid to men.

Education also does not impact the wage disparity. Women working full-time with master's degrees are paid 72 cents for every dollar paid to men with master's degrees. The gap persists even when women hold higher-level degrees than men. On average, women with doctoral degrees are paid less than men with master's degrees, and women with master's degrees are paid less than men with bachelor's degrees.

So, what does this mean for GSH 60 Sec Memo readers? Based on these raw statistics, it appears in every industry, in every state, conditions are ripe for equal pay and pay discrimination claims.

The Equal Pay Act, which is part of the Fair Labor Standards Act, and which is administered and enforced by the United States Equal Employment Opportunity Commission ("EEOC"), prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions. Job content (not job titles) determines whether jobs are substantially equal. All forms of pay are covered under the Equal Pay Act, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.

Not only can an individual alleging a pay disparity based on sex bring a claim under the Equal Pay Act, they may also bring a claim under Title VII and their state anti-discrimination statute.

Since 2005, 9,547 claims have been filed with the EEOC alleging violations of the Equal Pay Act, and the EEOC has helped to recover $86.6 million in connection with those claims.

An investigation into whether there is any legitimacy to the allegations of wage disparity will include an extensive review of the employer's structure and pay history. Typical documents that will be reviewed include organization charts that reflect the relative position of the charging party in comparison to other employees; job descriptions; descriptions of the employer's system for compensating employees, including collective bargaining agreements; entry level wage and salary history; policies or practices with regard to periodic increases; merit and other bonus compensation plans; and explanations from the employer about their pay practices. If the employer has ever retained a third-party to perform job evaluation studies that reflect its method of compensation and pay rates, those will be key pieces of evidence as well.

If pay disparity is found, the remedy under the Equal Pay Act includes a mandatory salary increase, back pay in the amount of the unlawful difference between the wages of the lower- and higher-paid comparator, attorneys' fees, and costs. The Equal Pay Act also provides for liquidated damages, at an amount equal to back pay, unless the employer proves that it acted in "good faith" and had reasonable grounds to believe that its actions did not violate the Equal Pay Act.

In addition to back pay and a raise, Title VII permits recovery of compensatory damages for intentional discrimination and recovery of punitive damages for discrimination that is intentional and engaged in with malice or reckless indifference to the federally protected rights of an individual.

Liquidated damages under the Equal Pay Act are compensatory in nature. Therefore, in a sex-based pay case under both the Equal Pay Act and Title VII, the charging party cannot obtain both liquidated damages under the Equal Pay Act and compensatory damages under Title VII. However, the relief will be computed to give the individual the highest benefit which entitlement under either statute would provide.

Employers should carefully review their compensation packages for all employees across their workforce to ensure they are not a target for an unequal pay claim in the future. Third-party review of pay structures can help the employer avoid liability on this hot-button issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.