The Equal Pay Act prohibits employers from paying employees unequal pay on the basis of their sex. This means that employers are to pay equal compensation to men and women who perform substantially equal work.
Compensation Discrimination
A claim of unequal compensation based on sex can be filed under either the Equal Pay Act (EPA) or Title VII of the Civil Rights Act of 1964 (Title VII). Both laws are enforced by the Equal Opportunity Employment Commission (EEOC). If you plan to file a claim under the EPA, you have two options:
- File a claim directly in court
- File a charge with the EEOC
Under either option, you must file your claim or charge within two years of an unlawful compensation practice or within three years of a willful or intentional violation. The time limits will not be extended if you choose to file with the EEOC and then later decide to file a lawsuit in court. Therefore, it is important that you consult with a labor and employment law attorney on the course to take and to ensure that your claim is timely filed.
If the EEOC investigates your claim and determines that it is valid, it may file a lawsuit against the employer on your behalf or you may choose to file the lawsuit on your own.
To make out a claim of pay discrimination, you must prove that:
- You received a lower wage than what was paid to your male coworker within the same establishment, and
- You and your male coworker performed substantially equal work in terms of skill, effort, responsibility and working conditions
Wages and Wage Rates
The term wages includes all payments to employees and all other forms of compensation including fringe benefits. If female and male employees receive the same pay for substantially equal work but receive unequal fringe benefits, the EPA is violated.
Examples of payments and fringe benefits included in the definition of wages include:
- Overtime pay
- Vacation pay
- Bonuses
- Expense allowances
- Health and life insurance
- Retirement benefits
- Stock options
- Profit sharing
The term wage rates is the measure by which compensation is calculated and typically consists of an hourly rate, a daily rate, a commission rate or a rate per piece or unit. If employees are paid on a commission basis and the rate for calculating commissions is the same for male and female employees, then any difference in the total commissions earned by the two workers is not a violation of the EPA.
Equal wages must be paid in the same form. Any difference in the payment of wages between a male employee and a female employee is enough to show unequal pay on the basis of sex:
- Male and female employees who are paid on an hourly basis for substantially equal work must receive the same hourly rate of pay
- An employer cannot pay male employees on an hourly basis and female employees on a daily basis, commission basis or some basis other than the hourly basis
- An employer can not try to equalize a difference in pay by giving female employees periodic bonuses
- An employer cannot replace a male employee with a lower paid female employee nor replace a female employee with a higher paid male employee
Questions for Your Attorney
- Salaries are private at my company so how can I tell if I'm getting equal pay as my male counterpart?
- Who determines what "substantially equal work" means at my company?
- If I find out that I'm not getting paid as much as my male counterpart, where should I complain?