United States: A New Age Of Pay Equity

April 2, 2019 marked the 13th anniversary of Equal Pay Day, a day first recognized by the National Committee on Pay Equity to raise awareness of the gender wage gap. Equal Pay Day is celebrated in early April because it is approximately the day until which a woman must work into the year to make the same amount earned by a man at the end of the previous year. While we have come a long way since 1996, when women earned on average just 73.8 percent of what men earned, we still have a long way to go. In 2017, women earned on average just 80.5 percent of what men earned and that percentage is even less for women of color.

While pay equity has been a topic of public discourse for decades, it has come to the forefront in conjunction with the #MeToo movement, as pay differences between high-profile men and women performing the same jobs have come to light. In 2018, Mark Wahlberg earned $1.5 million for reshoots for the movie, "All the Money in the World," while his co-star, Michelle Williams, earned just $1,000. And last month, the United States Women's Soccer Team sued the United States Soccer Federation alleging that, under the Federation's pay structure, a female player has the ability to earn just 38 percent of what a male player would earn with the same record. The Complaint highlights that the pay discrimination has persisted for years despite the women's team winning more games and more championships and outpacing the men's team in viewership and ticket sales.

Given the significant disparity in wages between men and women that exists today, most people do not realize that the Equal Pay Act, the first federal law addressing the gender wage gap, was enacted 56 years ago, in 1963. The Act, signed by President John F. Kennedy, made it unlawful for an employer to discriminate on the basis of sex by paying an employee of one sex higher wages than an employee of another sex for "equal work" in the performance of jobs requiring "equal skill, effort, and responsibility, and which are performed under similar working conditions" unless the difference in pay is based on seniority, merit, quantity or quality of production or a differential based on a factor other than sex.

The next federal legislation specifically aimed at addressing the gender wage gap, the Lilly Ledbetter Fair Pay Act, was not signed until 2009 — 46 years later. The Lilly Ledbetter Fair Pay Act, the first bill President Obama signed into law as president, overturned a Supreme Court decision significantly restricting the time period for filing complaints for discrimination in pay on the basis of sex. Despite repeated attempts by some lawmakers, there has been no further legislation enacted at the federal level to address gender pay equity since 2009.

As part of the movement toward pay equity that began with the Equal Pay Act, all but two states (Alabama and Mississippi) have passed some form of equal pay law. While the majority of these laws mirror the federal law, including New Hampshire's equal pay statute, a handful of states have enacted legislation which provide greater protections against pay discrimination.

The most powerful equal pay law in the country took effect last year, on July 1, 2018, in Massachusetts. The Massachusetts Equal Pay Act applies to all private, state and municipal employers regardless of size, and prohibits an employer from paying an employee of one gender less than an employee of an another gender for "comparable work." The Act defines "comparable work" more broadly than "equal work" under the Equal Pay Act as work requiring "substantially similar" skill, effort and responsibility performed under similar working conditions unless based on a permissible variation in pay such as seniority, merit, geography, productivity, education, training or experience. "Comparable work" may even include employees in different positions and departments.

The Massachusetts Equal Pay Act, like the equal pay laws in states such as Connecticut, California, Delaware, Oregon, and Vermont, also prohibits employers from asking about the wage or salary history of a prospective employee during the hiring process. The rationale behind this prohibition is that, because women have historically earned less than men, allowing employers to ask candidates about salary history and then make employment offers based on that salary history will only perpetuate the gender pay gap.

The most ground-breaking feature of the Massachusetts Equal Pay Act, however, is that it offers employers who have conducted a self-audit of their pay practices, as defined by the Act, an affirmative defense to liability should one of their employees file suit. Massachusetts is the first state to include such a defense in its equal pay law, and it remains to be seen how courts will grapple with employers who submit their self-audits in their defense. A critical component in utilizing this defense is being able to show that the employer has developed a plan to address an inequities discovered in the audit process.

While Massachusetts and other states are leading the charge against pay disparities by enacting comprehensive legislation, efforts at the federal level have stalled until just recently. In March, the House passed the Paycheck Fairness Act, which, if enacted, would close the loopholes in the Equal Pay Act, including by prohibiting employers form using salary history to set the salary for a new employee, protecting employees against retaliation for discussing their salaries at work, and allowing prevailing plaintiffs to recover compensatory and punitive damages. While the Senate is not expected to take up the bill, if Democrats gain control of Congress and the White House in 2020, it could be one of the first bills signed into law by the new administration.

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.

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