The Equal Pay Act

The Equal Pay Act

Introduction

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We are all familiar with equal pay, especially in the modern world, where workers increasingly understand their rights. Historically, society has been male-dominated, which reduced women to second-class citizens who would be compensated low wages for doing similar responsibilities and duties to their male counterparts. The fight for fairness in compensation led to the inclusion of the Fair Labor Standards Act of 1938, which prohibited sex-based wages. From 1938 onward, the call for equality in the United States continued to bring changes in a society that compensated women low wages than men. Further enforcement of fair and equal pay was done in 1963 when the members of Congress passed the Equal Pay Act (E.P.A.), which aimed to eliminate gender-based disparity in the country. In the United States, the history of equal pay has continued to push for the elimination of gender-based wages, which continues to suffer from unclarity, especially when it comes to its applicability when the issues of education qualifications, experience, seniority, collective bargaining agreement, and employee’s income records.

Background

The struggle for fairness and equal pay in the United States started decades ago when the pay gap was too wide between men and women who did the same duties, responsibilities, and hours. In response to this gender0based inequality, the constitution enacted the Fair Labor Standards Act of 1938. The law was meant to bring fairness, but Section 6 of the Fair Labor Standards Act of 1938, as amended (29 U.S.C. et Esq.), prohibited business enterprises from using gender as a criterion for paying wages and prohibiting child labor (the United States, 1971, p,210). Therefore, the FLSA OF 1938 became the first legal law that sought to bring equality in the payment of wages. The prohibition of enterprises from discriminating against individuals based on gender helped bridge the gap between the salaries earned by men and women. However, the FLSA of 1938 incorporated exceptions to Section 6 subsection (d) on payment of wages, such as when the enterprise uses a system such as a seniority, merit, or any other differential apart from gender element. In response to the inefficiencies of the FLSA of 1938, Congress enacted E.P.A. “…as an amendment to the Fair Labor Standards Act of 1938, which regulates minimum wages, overtime, and child labor” (Fugiero, 2018). However, the E.P.A. also offered exceptions when paying wages is a concern that enterprises can use in their defense.

Equal Pay Act (E.P.A.)

In the 19th and 20th centuries, the number of women working in all sectors of the economy increased drastically. The number of women working alongside men increased. Still, there was significant gender-based discrimination as women realized they were paid lower wages than men who worked the same job and had the same duties, skills, and experience. This reality pushed Congress to enact the E.P.A. in 1963 to tackle this gender-based pay inequality. According to the U.S. National Park Service (2017), “The Act made it illegal to pay men and women working different salaries for similar work in the same place.” Therefore, the E.P.A. became the law to ensure that employers are put on notice of workers’ pay. Anyone who would be guilty of paying wages that vary on workers working in the same place and doing the same job will be prosecuted. However, organizations and employers were given exemptions that they could rely on in defending unequal pay among their workers, such as;

  • Salary Negotiation
  • merit system or incentive system
  • bona fide seniority system or
  • any factor other than gender, such as income records

Therefore, the E.P.A. revolutionized the payment of wages in the U.S., and it improved women’s compensation drastically. However, to understand the effectiveness of the E.P.A. and its impact on wages, we must understand the options limiting equal pay in the workplace.

Applicability to the Equal Pay Act

Salary Negotiations

The process of recruitment and hiring involves salary negotiations. Most of the time, the employer is the first to ask the employee what pay they will be comfortable with, and the latter can quote their salary or not. Therefore, employers can use the agreement reached during the negotiation period to defend a worker’s pay. For example, Wang (2018) offers an instance where a female applicant negotiated a salary of $100,000 with the employer during the hiring process but later found out she was being paid less than the male counterpart that occupied the position previously. Therefore, in such a case, the employer can use a negotiation agreement in defense of the unequal pay, which is permitted by 29 U.S.C. § 206(d)(1)(iv). However, the negotiations agreement as “Factor Other Than Sex” remains contentious because the Equal Employment Opportunity Commission (EEOC) filed a complaint against the employer’s use of the negotiation agreement, saying it was against the E.P.A. According to Wang (2018), the use of negotiations agreement remains contentious. The best way that employers can use it to their advantage is by ensuring “…that its negotiation policies and practices are equally applied to male and female applicants.” Therefore, employers’ use of the “other than sex” exemption is not definite, and this has increasingly made organizations that find themselves in these situations spend so much time on court proceedings.

Merit and Seniority System

In a merit system, the employees are compensated based on their ability and fitness to perform a particular job in the workplace, not through their academic qualifications, gender, or sex. Therefore, the E.P.A. allows employers to pay high wages to specific employees even if they have the same skills and work in a similar job with other employees. They can prove they are using the merit pay system. Similarly, the seniority system is another defensive exemption offered in the E.P.A. that employers can use to pay workers with the same position and skills. The employer can use the seniority system to defend unequal pay. The application of the methods is evident in international organizations such as Microsoft and Amazon, where senior employees such as Chief Executive Officers and Managers are paid more than employees. However, the merit and seniority systems have been criticized for violating E.P.A. under the “comparable worth” issue. According to Legler (1985), Proponents believe that “whole classes of jobs are traditionally undervalued and underpaid because women hold them, and …this…amounts to sex discrimination in violation of Title of the Civil Rights Act of 1964” (p.229). Therefore, the merit and seniority system translates to unequal payment under E.P.A. It means that women who mostly occupy traditional jobs will remain underpaid because of the negative stereotypes that demean their jobs socially and religiously non-paid. Although these compensation systems continue to get backlash, especially from feminists, the most contentious in the E.P.A. is the use of income records or salary history.

Income Records or Salary History Requests

The E.P.A. is a law that continues to suffer from significant loopholes that employers use to continue the discrimination of wages and salaries based on sex and gender. The inclusion of various affirmative defenses has made it difficult for pay equality in all sectors. According to Vandenberg (2020), the “factor other than sex” is one of the sections in the E.P.A. that employers exploit, and the “circuit courts disagree on the extent to which employers can frame reliance on an employee’s salary history as a “factor other than sex” (p.246-7). Therefore, the interpretation of the “factor other than sex” has remained contentious in the applicability of the E.P.A. of 1963 which means that the struggle for equal pay is far from being achieved. The gender-based pay in the United States remains a problem as employers exploit the loopholes in the E.P.A. to legalize a wage differential in the workplace.

E.P.A. has reduced the pay gap between male and female workers. However, the disparity is still prevalent in many organizations, and affirmative defenses have become the main reason why unequal pay has not been banned in its totality. In the case Beck-Wilson. Principi (n.d) asserts that the Court would require a plaintiff to prove that his or her employer is paying “…employees of opposite sexes “for equal work on jobs the performance of which requires equal skill, effort, and responsibility and which are performed under similar working conditions.” Therefore, the employee who feels that their payment is lower than that of a colleague doing the same duties and applying the same effort can sue for a compensation claim based on the E.P.A. law. However, the employer sees this as a law that is hard to fulfill and has resulted in looking for loopholes in the Act to defend their unequal pay in the workplace. Employers have used pay history and income records to deny female employees equal pay. Lawless (2020) gives an example of Ms. Rizo, who, in 2009, was a female teacher who had just relocated to California from Arizona and got employed based on her pay history after her new employer asked for her income records. The employer used the “other than sex” affirmative defense to deny Ms. Rizo equal pay as other male teachers because her current salary was not below her previous salary. Ms. Rizo went to Court, and the employer used the “other than” sex” defense. However, the Ninth Circuit Court of Appeals judgment sided with Ms. Rizo because “that only job-related factors may be considered in connection with the factor-other-than-sex defense” (Lawless, 2020). The decision shows that the Court looks at whether the “other than sex” defense is related to the job in question. Therefore, Ms. Rizo’s last pay did not relate to her current pay. The employer violated the E.P.A. by paying her less than male teachers because of her gender because the employer could not prove that her duties and skills were different from other workers.

Reckless Discrimination

Many employers are ignorant of adhering to the E.P.A., making it easy for employees to receive unequal pay and the company to lose money from a compensation claim. Therefore, most of the violation of E.P.A. is not from the failure to understand the law and its implications but the employer’s choice to ignore them, which leads to reckless discrimination in paying wages to employees. Looking at the developments in the Roberts Court in previous years, it is “doctrinally incoherent for the Court to fail to extend tort concepts to Title VII.” (Bornstein, 2017). On the same note, it would seem incomprehensible to fail to extend the concept of recklessness to the E.P.A. The model of reckless discrimination would undermine an employer’s affirmative defense, and at the same time, it would show proof of liability for a discriminatory wage differential under the E.P.A. Therefore, reckless discrimination should be incorporated into the E.P.A. because most employers rely on unchecked subjective decision-making, which continues the problem of gender-based pay. The employer’s ignorance of ensuring that the E.P.A. is upheld should not be considered an unintentional mistake. Still, the Court should view the Act as intentional disparate treatment under Title VII.

Recommendations

The different Circuit courts should use other laws to protect equal pay in the workplace. For instance, “Most applicable is Section 10 of the Paycheck Fairness Act, which creates a blanket ban on the use of salary history in determining salary” (Watkins, n.d, p.1067). Therefore, employers using the E.P.A. loopholes, such as asking for an employee their income records, should not be tolerated because it is against the Paycheck Fairness Act, which seeks to protect female employees from discrimination. According to Watkins, the only way actual equal pay can achieve is by ensuring a total ban on employers asking for employees’ pay history or income records during and after the hiring process (Watkins, n.d, p.1082). The government should consider revising the E.P.A. to seal the loopholes provided in the “other than sex” defenses because employers are selfishly using it to continue paying female employees low wages than men.

Conclusion

The E.P.A. law was meant to eliminate the problem of unequal pay in the United States. However, decades later, female workers continue being discriminated against based on gender by being subjected to low wages compared to male employees. Therefore, the Ninth Circuit act of overturning its previous cases, such as that involving Ms. Rizo, made it impossible for the employer to use income records as a “factor other than sex” within the fourth affirmative protection to an E.P.A. claim. Just because the Ninth Circuit and numerous governments have reconsidered their technique to income records, plaintiffs ought to rethink how they body their salary differential claims below the Equal Pay Act. Plaintiffs should ensure that they have evidence that links their pay to violation of the E.P.A. before coming to Court by establishing those other employees performing the same work hours, having similar skills, and putting in the same effort. Employers that use seniority and merit systems should also communicate this to the employee before hiring. The Supreme Court can deal with the fourth affirmative defense in an Equal Pay Act claim. The Court has to view the reliance on earnings records as a gender exercise that no longer qualifies as a “component aside from sex” under the E.P.A. Congress can review the E.P.A. of 1963 by enacting a clause that will offer more clarity to the fourth affirmative defense.

 

 

References

[USC02] 29 U.S.C. Ch. 8: Fair Labor Standards. (n.d.). Uscode.house.gov. https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter8&edition=prelim

Beck-Wilson v. Principi, 441 F.3d 353 | Casetext Search + Citator. (n.d.). Casetext.com. Retrieved April 18, 2022, from https://casetext.com/case/beck-wilson-v-principi

Bornstein, S. (2017). Reckless Discrimination Reckless Discrimination. https://doi.org/10.15779/Z388P5V86M

Wang, A. H. (2021, December 9). Salary Negotiation Can Provide Affirmative Defense to Equal Pay Act Claim as “Factor Other Than Sex.” Littler Mendelson P.C. https://www.littler.com/publication-press/publication/salary-negotiation-can-provide-affirmative-defense-equal-pay-act-claim

Equal Pay Act of 1963 (U.S. National Park Service). (2017). Nps.gov. https://www.nps.gov/articles/equal-pay-act.htm

Fugiero, M. (2018). Equal Pay Act of 1963 | United States [1963]. In Encyclopædia Britannica. https://www.britannica.com/topic/Equal-Pay-Act

Legler, J. I. (1985). City, County, and State Government Liability for Sex-Based Wage Discrimination After County of Washington v. Gunther and AFSCME v. Washington. The Urban Lawyer, 17(2), 229–275. https://www.jstor.org/stable/27893295

Ninth Circuit Confirms That Salary History May Not Be Used to Justify Unequal Pay (U.S.). (2020, February 28). Employment Law Worldview. https://www.employmentlawworldview.com/ninth-circuit-confirms-that-salary-history-may-not-be-used-to-justify-unequal-pay-us/

States, U. (1971). United States Code. In Google Books. Office of the Law Revision Counsel of the House of Representatives. https://books.google.co.ke/books?id=CuksAP4vwEoC&pg=RA4-PA8024&lpg=RA4-PA8024&dq=Provided

Vandenberg, K. (2020). Salary History and the Equal Pay Act: An Argument for the Adoption of “Reckless Discrimination” as a Theory of Liability. Northwestern Journal of Law & Social Policy, 15(2), 246. https://scholarlycommons.law.northwestern.edu/njlsp/vol15/iss2/4/

Watkins, T., Watkins, A., & Torie. (n.d.). The Ghost of Salary Past: Why Salary History Inquiries Perpetuate the Gender Pay Gap and Should Be Ousted as a Factor Other Than Sex Recommended Citation. https://scholarship.law.umn.edu/cgi/viewcontent.cgi?article=1068&context=mlr

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