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Equal Pay Act: Erase the sex from your pay grades

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in Compensation and Benefits,Employment Law,Human Resources

THE LAW. The Equal Pay Act (EPA) of 1963 prohibits employers from dishing out different wages or bene-fits on the basis of gender for "equal work on jobs (requiring) equal skill, effort and responsibility and which are performed under similar working conditions."

The EPA applies to all employees covered by the Fair Labor Standards Act, which means virtually all employees, and has no exclusion for small businesses. The law is administered by the Equal Employment Opportunity Commission (EEOC), which can conduct equal-pay audits even if it hasn't received a complaint and can initiate lawsuits on behalf of workers.

WHAT'S NEW? There's evidence the wage gap is widening, and that could spark more complaints and more inspections.

Also, the EEOC is already seeing the fruits of an Equal Pay Task Force it set up two years ago. Last year, employees filed 1,251 equal-pay charges and the EEOC brought in a record amount of monetary awards for workers, more than $5 million, compared with less than $2 million just five years ago.

HOW TO COMPLY. The law seems very straightforward: It requires that men and women be given equal pay for equal work. The jobs don't have to be identical, but they must be "substantially equal." Focus on the job content, not titles, to decide whether jobs are substantially equal.

When doing a self-audit of your workplace (or determining if a worker has a valid equal-pay case), always look at the factors a court would examine:

Skill. Look at the experience, ability, education and training required to perform a job, not what skills the individual employees have. Example: Two accounting jobs could be considered equal under the EPA even if one of the employees has a master's degree in physics, since that degree isn't required for the job.

Effort. Look at the physical or mental exertion needed to do the job. Suppose men and women work on an assembly line, but the employee at the end must perform his task and also lift the product into a box. That job requires more effort than the other jobs if the extra lifting is a substantial and regular part of the job. Net effect: You could pay that person more.

Responsibility. Look at the level of accountability needed to do the work. If you're assigning a minor difference in responsibility, it wouldn't be a factor.

Working conditions. This encompasses two things: physical environment, like temperature or ventilation, and workplace hazards. A more dangerous or demanding environment allows for a higher pay grade.

Key point: You can also set "pay differentials" when they're based on seniority, merit, quantity or quality of work or another business reason other than gender. Just be prepared to show a sound business reason why those differentials exist, and have good documentation of your reasons for employee pay levels.

Three other tips

  • Have accurate job descriptions to help justify pay-for-performance disputes. 
  • Offer equal amounts of overtime. It's illegal to favor a man because of a woman's "family constraints" or pregnancy. 
  • If you discover equal-pay problems, it's illegal to lower the wages of either sex to equalize the pay. 

Resources: Equal Pay Act 

  • The EEOC's Equal Pay and Compensation Discrimination Web page, www.eeoc.gov/epa. 
  • The Equal Pay Act in full, www.eeoc.gov/laws/epa.html. 
  • Ten steps to performing an equal-pay self-audit at your company, www.dol.gov/wb/10step71.htm.

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