Women’s Equality Day ~ how are you compliant with pay equity?

2020 represented the 100th year since ratification of women’s right to vote. As the 19th Amendment to the Constitution, its passage date of August 26 was designated by Congress as Women’s Equality Day in 1973. While disparities of gender, race, sexual identity and ethnicity are prevalent throughout our social and working structure, the practical impact of these distinctions shows up most visibly in pay differences.

There are several ways to look at these distinctions. For example, the concept of pay equity takes into account systemic issues, conscious and unconscious biases, social norms, educational opportunities and inherited wealth – all situations that are more often likely to affect women negatively.

The concept of pay equality refers to the broadly general statistic that among working women throughout all industries, they earn approximately .81 for every $1 men earn across all industries. For women of color, the percentage is even less. However, it is here that employers have the opportunity – in fact the legal responsibility – to ensure parity is maintained across genders doing the same work at any work location.

At the Federal level, both the Equal Pay Act and Title VII require men and women in the same workplace, doing substantially the same jobs, be paid the same; this includes salary, overtime, bonuses, stock options, profit sharing, life insurance, vacation – in fact, all forms of financial benefits.

In our home state of Montana, the Equal Pay Law prohibits discrimination in wages or compensation for equivalent service or the same class of work in the same place of employment, whether in public or private enterprise. Further, Montana agrees with the 2009 Lilly Ledbetter Fair Pay Act, amending Title VII, that work of equal value to the employer – even if not similar in function or condition – must be compensated equally.

More than that, the Lilly Ledbetter Fair Pay Act says that each paycheck received by an employee who later claims discrimination represents a separate act of discrimination with a separate fine assessed.

This is tricky! How do you measure ‘equal value to your business’, especially if the job titles or functions call for different skill sets? The best way to confirm that you’re within the boundaries of safety, fairness and legality is to speak with a Human Resources professional; it’s our job to be up to date on all human resources regulations and ensure you are in compliance. Please contact us anytime regarding your employee policies. And, in the meantime, you can learn more about this issue here, from the Equal Employment Opportunity Commission.

EQUAL PAY ACT OF 1963

The Equal Pay Act (EPA) prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions.

  • Wages can include more than just hourly or annual pay. Wages includes bonuses, company cars, expense accounts, insurance etc.
  • An employer cannot lower the wages of some employees to make wages equal.

Things to Consider:

Equal Wages: Must be paid in the same form. For example, an employer cannot pay a higher hourly wage to a male employee and then attempt to equalize the difference by periodically paying a bonus to a female employee.

The EPA speaks in terms of equal work, but the word “equal” does not require that the jobs be identical, only that they are substantially equal. In comparing two jobs for purposes of the EPA, consideration should be given to the actual job duties, not job titles or classifications. The EEOC looks at whether both jobs require the same skill, effort and responsibility.

Skill: Measured by factors such as the experience, ability, education and training required to perform a job. Possession of a skill not needed to meet the requirements of the job should not be considered. For example, a hotel clerk alleges that he is paid less than a female who performs substantially equal work. He has a high school diploma while his female co-worker has a college degree. However, performance of the two jobs requires the same education, ability, experience, and training.

Therefore, the skill required to perform the two jobs is substantially equal. A college degree does not justify a higher salary because it is not needed to perform the job.

Effort: Amount of physical or mental exertion needed to perform job.

Responsibility is usually defined as the degree of accountability required in performing a job. Factors to be considered in determining the level of responsibility in a job include:

  • Extent to which employee works without supervision,
  • Extent to which employee exercises supervisory functions, and
  • Impact of employee’s exercise of his or her job functions on the employer’s business.

Ordinarily, “establishment” means a physically separate place of business. However, given that many employees have virtual offices, the EEOC assesses whether the “establishment” is separate on a case-by-case basis.

Working conditions usually consist of two factors:

  • Surroundings, and
  • Hazards.

Lilly Ledbetter Fair Pay Act of 2009: On January 29, 2009, President Obama signed the first piece of legislation of his Administration: the Lilly Ledbetter Fair Pay Act of 2009 (“Act”). This law overturned the Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., 550 U.S. 618 (2007), which severely restricted the time period for filing complaints of employment discrimination concerning compensation.

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