The Equal Pay Act (EPA) requires that men and women in the same workplace be given equal pay for substantially similar work. The EPA is a strict liability law.
What that means: If an employee sues, all she has to prove is that she is being paid less than a similar employee of the opposite sex. That’s easy. Then it’s the employer’s burden to show that the reason for the difference is clearly some factor other than sex.
Seniority may explain salary differences, as may productivity or quality of the work performed. Those are among many “factors other than sex.” Not included, however, are internal pay policies that limit annual raises to increases of just a certain percentage.
Simply put, if you discover a pay disparity between substantially similar male and female employees, fix the problem right away to let women catch up. Don’t use pay policies as an excuse to slow the process.
Recent case: Kendra worked as an engineer for an auto parts plant. When Siemens purchased the plant, Kendra discovered that men who were doing the same job earned more than she did. She complained and demanded a raise. Siemens began giving her generous annual increases designed to bring her up to parity.
Kendra sued anyway and a jury decided Siemens violated the EPA when it refused to bring her salary up right away. Siemens appealed.
Now the 11th Circuit Court of Appeals has refused to overturn the verdict. It concluded that an internal annual increase cap isn’t an allowable factor other than sex that can justify continued pay differences. (Hall v. Siemens, No. 10-15106, 11th Cir., 2012)
Final note: Pay inequality is something to fix sooner rather than later. Then, in the future, make sure you note the reason for any new pay disparities—and that the reason is attributable to a factor other than sex.