The federal Equal Pay Act (EPA) says it’s illegal to 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.”
That means, under the EPA, employers can set different salaries based on geographically distinct job locations.
In other words, you aren’t required to pay a manager in New York City the same as one in a lower-cost locale, even if the New York manager is male and the manager in the other location is female. Plus, any differences in responsibilities can help justify the difference.
Of course, you can expect a legal complaint if you reverse the sexes and decide to pay a woman assigned to New York less than a man working in Small Town USA.
Recent case: Jeanette Renstrom worked for Nash Finch as a grocery buyer from 1979 until 2009, when she retired. That’s when she sued, alleging pay discrimination.
She claimed two male grocery buyers in other locations were paid more than her. Nash Finch argued that the positions weren’t equal and the locations required different compensation plans.
As an example, it explained that the men had much larger territories to manage and had to do far more work than Renstrom did. That was enough for the court to toss out the case. (Renstrom v. Nash Finch, No. 09-CV-1823, DC MN, 2011)
Final note: Remember, employees can challenge pay decisions years after the fact, based on the impact on their current paychecks.