Equal Pay Act

The Equal Pay Act (1963), which makes pay discrimination based on gender illegal, was designed to correct the wage gap for women. At the time female workers were being paid 60 percent of what male workers were making. By 1999 women were earning 75 percent of men’s wages. Until 1999 the Equal Pay Act had rarely been a major concern for businesses. In that year the Clinton administration pushed for expanded use of equal-pay auditors, raising the importance of addressing pay discrimination. In 1999, after the DEPARTMENT OF LABOR conducted a “glass ceiling” audit, Texaco paid female employees over $3 million. Other companies and government agencies scrambled to assess and address pay discrimination. The general provisions of the Equal Pay Act (referred to as the EPA in HUMAN RESOURCES literature) requires equal pay for equal work and prohibits paying an employee of the opposite gender less if the work both employees in an establishment do is the same or substantially the same. Close examination of the act requires legal assistance, but according to the law, “same or substantially the same work” refers to job content, not job titles or descriptions. “Opposite gender” means the EPA protects both men and women from pay discrimination. Under the EPA, pay refers to all payments and benefits including PROFIT SHARING, bonuses, and expense accounts. An establishment is defined as a distinct physical place of business. Thus employers can pay different wages to people doing the same work at different locations. the act exempts certain categories of employees, but in 1999, when faced with the potential of a pay audit, many companies were forced to look closely at their pay practices. While the EPA challenges gender-based pay discrimination, generally pay differences are legal when based on
• differences in level of skill
• unequal effort
• differences in responsibility
• differences in working conditions
• differences based on a SENIORITY system
• differences based on a merit system
Many pay-discrimination lawsuits have defined and redefined the legal parameters associated with the Equal Pay Act. The EPA is enforced by the Equal Employment Opportunity Commission.