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What is the Equal Pay Act?
Oct 23, 2024 8:00:00 AM
The Equal Pay Act (“EPA”) requires that men and women in the same workplace be given equal pay for equal work. The jobs need not be identical, but they must be substantially equal. Job content (not job titles) determines whether jobs are substantially equal.
Specifically, the EPA provides that 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.
Each of these factors is summarized below:
Each of these factors is summarized below:
- Skill - Measured by factors such as the experience, ability, education, and training required to perform the job. The issue is what skills are required for the job, not what skills the individual employees may have.
- Effort - The amount of physical or mental exertion needed to perform the job.
- Responsibility - The degree of accountability required in performing the job.
- Working Conditions - This encompasses two factors: (1) physical surroundings like temperature, fumes, and ventilation; and (2) hazards.
- Establishment - The prohibition against compensation discrimination under the EPA applies only to jobs within an establishment. An establishment is a distinct physical place of business rather than an entire business or enterprise consisting of several places of business. In some circumstances, physically separate places of business may be treated as one establishment.
What is Covered by the EPA?
All forms of pay are covered by this law, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, health benefits, and any other form of remuneration.
Exceptions
Pay differentials may be permitted when they are based on seniority, merit, quantity or quality of production, or another factor other than sex.
If a pay differential has occurred, in correcting it, no employee's pay may be reduced. Instead, the pay of the lower paid employee(s) should be increased.
Don't Forget Your State Laws!
While the federal EPA prohibits unequal pay based on an employee’s sex, many states expand these same protections to additional protected classes, including race, religion, sexual orientation, gender identity, marital status, and disability, among others. However, despite what is protected in your state, the best practice is to simply pay all employees fairly and equally regardless of their personal characteristics.
All forms of pay are covered by this law, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, health benefits, and any other form of remuneration.
Exceptions
Pay differentials may be permitted when they are based on seniority, merit, quantity or quality of production, or another factor other than sex.
If a pay differential has occurred, in correcting it, no employee's pay may be reduced. Instead, the pay of the lower paid employee(s) should be increased.
Don't Forget Your State Laws!
While the federal EPA prohibits unequal pay based on an employee’s sex, many states expand these same protections to additional protected classes, including race, religion, sexual orientation, gender identity, marital status, and disability, among others. However, despite what is protected in your state, the best practice is to simply pay all employees fairly and equally regardless of their personal characteristics.
