Architectural Columns

My Two Cents on Equal Pay Laws

By Diane Williamson

The gender wage gap refers to the difference in earnings between women and men. Experts have calculated this gap in different ways, but the varying calculations point to a consensus: women on average earn less than men, and the gap is wider for women of color. It is illegal to pay an employee who is a member of a protected class (like gender or race) less than other workers who perform substantially similar work, but enforcing equal pay laws is difficult.

The statistic that women make only 81 cents for every dollar a man makes is slightly misleading.[1] Yes, overall, the average pay for men and women differs to that extent—and the gap is even greater if you consider women of color compared to White men. Nevertheless, simply looking at averages does not tell us much about the causes. It might be that women choose to work fewer hours than men do or that our society does not value careers that are traditionally held by women as highly as careers traditionally held by men.

The more important statistic is the controlled gender pay gap, which was 98 cents for every dollar in 2020.[2] In other words, on average a woman makes 98 cents for every dollar a man makes—doing the same job. Of course, some careers have a greater controlled pay gap than others. (Oddly, female anesthesiologists suffer the greatest pay disparity compared to their male counterparts.)

Do not dismiss the importance of two cents! Over the course of her career, the median woman will earn almost a million dollars less than the median man performing the very same work. You can see why legislators, past and present, attempt to address this stubborn disparity.

At the federal level, in 1963, the minimum wage provision of the Fair Labor Standards Act was amended to include the Equal Pay Act (EPA). Congress’s purpose in enacting the EPA was to remedy what was perceived to be a serious and endemic problem of employment discrimination in private industry, namely the fact that the wage structure of “many segments of American industry has been based on an ancient but outmoded belief that a man, because of his role in society, should be paid more than a woman even though his duties are the same.” S. Rep. No. 176, 88th Cong., 1st Sess. 1 (1963).

The solution adopted was quite simple in principle: to require that equal work be rewarded by equal wages. While there have been successful Equal Pay Act suits, especially because there is no need to show an intention to discriminate, in general it is difficult to show that the two jobs are “substantially equal.”

In evaluating whether one employee makes less money than others of the opposite sex for “substantially equal” work, a court will consider the required skills, effort, responsibility, and working conditions. The lesser paid employee often has trouble pointing to other employees whose jobs are similar enough. For example, one U.S. Court of Appeals decision found that professors in different departments at the same University did not perform “substantially equal” work.[3]

At the end of January, the Paycheck Fairness Act was introduced into the House of Representatives. The bill includes many proposals to strengthen the EPA. One of the most important is the broadening of the requirement that the two jobs be at the same “establishment.” Under the current law, “establishment” by and large means the same physical space, which excuses many cases of obvious pay disparity simply because the workers work at different locations. The Paycheck Fairness Act would broaden the definition of “establishment” to include locations within the same county.

Another important change would be a protection against retaliation for employees who discuss wage and salary rates. Common sense tells us that most employees cannot even consider bringing an EPA claim because they have no idea what their coworkers are paid. Arguably, a law that would put the onus on employers to be transparent in their pay practices would go even farther to resolve this problem.

Passing the Paycheck Fairness Act would help, but it would not eliminate the inherent difficulty imbedded in the EPA of demonstrating that two workers perform substantially equal work.

In New York, a trio of amendments passed in 2019 strengthened the state’s equal pay protections. More specifically, the amendments 1) prohibit wage discrimination based on any protected class, not just gender, 2) extend the equal pay law to protect public employees, and 3) ban employers from making an applicant provide salary history as a condition of employment.[4]

The controlled gender pay gap has not changed since 2016, but the uncontrolled pay gap—as wide as it is—seems to be shrinking every year. Hopefully, these legislative changes—as minor or technical as they may seem—will keep us moving in the right direction.

 

[1] https://www.payscale.com/data/gender-pay-gap

[2] https://www.payscale.com/data/gender-pay-gap

[3] Spencer v. Virginia State University, 919 F.3d 199, 204-5 (4th Cir. 2019)

[4] If passed, the Paycheck Fairness Act would also prohibit employers from inquiring about the wage history of an applicant. The logic is that if an applicant has experienced pay discrimination in the past, inquiries into wage history only repeat that discrepancy.

 

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