This week, we take a walk through history as we celebrate Equal Pay Day.

Equal Pay Day

Happy Equal Pay Day! The first Equal Pay Day was on April 11, 1996, to represent how far into the year women needed to work to be paid what men had made the previous year.

Fast-forward to 2024. This year, we will mark Equal Pay Day on March 12, still representing gender disparity as we continue to work towards the goal of pay equality.

The Equal Pay Act

John F. Kennedy signed the Equal Pay Act into effect in 1963. He called it a “significant step forward” for women in the workforce.

The Equal Pay Act (EPA) requires men and women to be paid equally for equal work in the same establishment. Employers may not pay unequal wages to men and women who perform jobs that require substantially equal skill, effort, and responsibility and that are performed under similar working conditions within the same establishment.

Fair Labor Standards Act

Prior to this, in 1938, Franklin D. Roosevelt signed the Fair Labor Standards Act (FLSA) into law. The FLSA has undergone numerous changes over the years and has a wide array of regulations for both salary and hourly employees.

The equal pay provisions of the FLSA prohibit sex-based wage differentials between men and women employed in the same establishment who perform jobs that require equal skill, effort and responsibility and are performed under similar working conditions.

These provisions, as well as other statutes prohibiting discrimination in employment are enforced by the Equal Employment Opportunity Commission.

Equal Pay: What you need to know

To be compliant, you need to know five main criteria for equal pay. Note that it’s not about jobs being identical but rather substantially equal. Job content, not the job title, determines whether jobs are substantially similar.

1. Skill Level: The experience, ability, education and training required to perform the job. The focus is on what skills are needed for the job rather than what skills the individual employees may have.
2. Effort: This pertains to the amount of physical or mental exertion needed to perform the job.
3. Responsibility: How much accountability is required to perform the job.
4. Working Conditions: Physical surroundings like temperature, fumes and ventilation, as well as possible hazards.
5. Establishment: The EPA looks at jobs and salaries within the same establishment. An establishment is a distinct physical place of business rather than an entire company with several locations. In some circumstances, physically separate places of business may be treated as one establishment.

There are times when pay can be different. This might be based on seniority, merit, quantity or quality of production, or a factor other than sex. These are known as “affirmative defenses”. As an employer, you must be able to prove that they apply.

EEOC’s Cases: Pay Discrimination

Cases involving pay differentiation have less history than the previously mentioned and are more current events.

EEOC v. Dell, Inc.: The EEOC alleged that the computer company paid Kea Golden, an Information Technology (IT) Systems Analyst with 24 years of experience in IT, $17,510 less per year than a male coworker who was hired at the same time and did the same work. Dell agreed to pay Golden $75,000 in monetary relief, provide specialized training on equal pay laws and post a notice of employees’ rights to equal pay.

EEOC v. Jerry’s Chevrolet Inc.: The EEOC alleged that a family of auto dealerships in Baltimore paid dispatcher Jessica Dotterweich hundreds of dollars less each month than a male dispatcher performing equal work and then fired her after she complained. In addition to providing $62,500 in monetary relief to Dotterweich, the company agreed to adopt equal pay policies for similar work and train its managers and supervisors on preventing sex-based wage discrimination.

Local Equal Pay Regulations

Not only is it essential to be familiar with The Equal Pay Act and the FLSA, but some states have expanded the laws of the Equal Pay Act of 1963 through state legislation. Most states have equal pay laws that reiterate the importance of federal law or add additional legislation.

California, for example, signed The California Fair Pay Act in 2015. This state law establishes additional requirements; for example, employees do not need to work at the same location to be considered to have comparable jobs.

March 12 is the day we celebrate how far we have come and how we can strive to evolve and do better. Contact us for your customized session to stay compliant with equal pay.

ClearPath is a leading Human Resources Outsourcing company focusing on assisting employers to leverage the independent contractor labor market. We’re committed to helping business owners stay compliant and minimize the risks associated with their contingent labor requirements.

No Legal Advice Intended. This article includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal issues.