Part 5: Duties to Employees

65 What are requirements for equal pay?

The Equal Pay Act of 1963 prohibits pay discrimination based on sex, but employers have a variety of defenses to justify unequal pay.

Equal Pay Act

The Equal Pay Act of 1963 protects both men and women from pay discrimination based on sex. The act covers all levels of private sector employees and state and local government employees but not federal workers. The act prohibits disparity in pay for jobs that require equal skill and equal effort. Equal skill means equal experience, and equal effort means comparable mental and/or physical exertion. The act prohibits disparity in pay for jobs that require equal responsibility, such as equal supervision and accountability, or similar working conditions.

In making their determinations, courts will look at the stated requirements of a job as well as the actual requirements of the job. If two jobs are judged to be equal and similar, the employer cannot pay disparate wages to members of different sexes. Along with the EEOC enforcement, employees can also bring private causes of action against an employer for violating this act. There are four criteria that can be used as defenses in justifying differentials in wages: seniority, merit, quantity or quality of product, and any factor other than sex. The employer will bear the burden of proving any of these defenses.

A defense based on merit will require that there is some clearly measurable standard that justifies the differential. In terms of quantity or quality of product, there may be a commission structure, piecework structure, or quality-control-based payment system that will be permitted. Factors “other than sex” do not include so-called market forces. In Glenn v. General Motors Corp., the US Court of Appeals for the Eleventh Circuit rejected General Motor’s argument that it was justified in paying three women less than their male counterparts on the basis of a “market force theory” that women will work for less than a man.[1]

Exercises

  1. If the Eleventh Circuit Court of Appeals had come to the opposite conclusion, what implications would this have had for the Equal Pay Act?

  1. Glenn v. General Motors Corp., 841 F.2d 1567 (1988).

License

Icon for the Creative Commons Attribution-NonCommercial 4.0 International License

Business Ethics: 100 Questions Copyright © by Jeff Lingwall is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, except where otherwise noted.