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Diversity, Inclusion and Equal Opportunity Office    
Wage Discrimination - What Supervisors Need to Know

See also: Sex Discrimination - What Supervisors Need to Know

See also: Pregnancy Discrimination - What Supervisors Need to Know

Excerpts taken from The U.S. Equal Employment Opportunity Commission "Training and Technical Assistance Program 2002" and online at http://www.eeoc.gov/facts/qanda.html


Q & A: Wage Discrimination - What Practices Are Discriminatory?

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, or national origin.

It is illegal to discriminate in any aspect of employment, including:
  • hiring and firing;
  • compensation, assignment, or classification of employees;
  • transfer, promotion, layoff, or recall;
  • job advertisements;
  • recruitment;
  • testing;
  • use of company facilities;
  • training and apprenticeship programs;
  • fringe benefits;
  • pay, retirement plans, and disability leave; or
  • terms and conditions of employment.
Equal Pay Act

The Equal Pay Act requires that men and women be given equal pay for equal work. The jobs need not be identical, but they must be substantially equal. It is job content, not job titles, that determines whether jobs are substantially equal.

Note that:
  • Employers may not reduce wages of either sex to equalize pay between men and women.
  • A violation of the EPA may occur where a different wage was/is paid to a person who worked in the same job before or after an employee of the opposite sex.
  • A violation may also occur where a labor union causes the employer to violate the law.


Equal Pay Act Requirements

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.
Skill They key issue is what skills are required for the job, not what skills the individual employees may have. For example, two bookkeeping jobs could be considered equal under the EPA even if one of the job holders has a master's degree in physics, since that degree would not be required for the job.

Effort

For example, suppose that men an women work side by side on a line assembling machine parts. The man at the end of the line must also lift the assembled products as he completes his part, and place it on a board. That man's job would not be considered to involve equal effort as the other assembly line jobs if the extra effort of lifting the assembled product off the line is substantial and is a regular part of the job.

Responsibility

For example, a salesperson who is delegated the duty of determining whether to accept customers' personal checks has more responsibility than other salespeople. On the other hand, a minor difference in responsibility, such as assignment of the task of locking up at the end of the day, would not justify a pay differential.
Defenses under the Equal Employment Act

Wage differentials are permitted when they are based on:
Seniority

The wage differential can be based on a bona fide seniority system. To be bona fide, it must be an established seniority system that is communicated to employees and consistently applied, and it must not have been adopted with a discriminatory purpose.

Merit

A wage differential can be based on a merit system which is communicated to employees and consistently applied. The merit system should be based on objective performance rather that subjective criteria. The more subjective the criteria, the more scrutiny that is applied. Thus, in one case a bank was unable to rely on its purported merit system to justify different pay for male and female tellers where the primary consideration in pay decisions was a high official's "gut feeling" about each employee.

Quantity or quality of production

For example, if sales people are paid a commission for each item sold, and if males tend to receive a greater total salary than females due to their greater volume of sales, there will be no violation of the EPA.

Any other factor other than sex

For example, an employee's job-related education, experience or training may justify a wage differential. Thus, a male physics professor with a Ph.D. in physics could be paid more than a female physics professor with just a master's degree. Another example of a factor other than sex is "red circled: rates. Thus, if an employee is moved from machinist work to clerical because of his failing health, you can keep paying him his higher salary without having to raise the pay of all female clerical employees.