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The Equal Pay Act: What Employers Need to Know

According to a 2016 survey by the Bureau of Labor Statistics, median weekly earnings for men age 16 and older who were full-time wage and salary workers were $915, while the median for female workers was $749 — an 18 percent difference.

Passed in 1963 and enforced by the U.S. Equal Employment Opportunity Commission, the Equal Pay Act (EPA) requires that men and women receive equal pay for equal work within the same establishment. The law covers all forms of compensation, including but not limited to salary, overtime pay, bonuses, vacation and holiday pay, benefits, travel allowances, stock options, and profit sharing plans.

What Constitutes “Equal Work” Under the EPA?

Under the Equal Pay Act, jobs need not be identical to require equal pay for male and female employees, but they must be “substantially equal.” The Act specifies five factors to consider in determining whether two jobs are substantially equal:

  • Skill: Knowledge and expertise needed to perform the specific job in question, considering factors such as experience, ability, training, and education
  • Effort: The amount of physical or mental exertion required to perform the job
  • Responsibility: The degree of accountability the job requires
  • Working Conditions: Physical factors such as temperature, ventilation, and exposure to fumes or other hazards
  • Establishment: The jobs must be performed within the same physical place of business.

 

The Act does permit differential pay if it is based on seniority, merit, quantity or quality of production, or a factor other than gender.

What Other Federal Laws Cover Compensation Discrimination?

Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, and Title I of the Americans with Disabilities Act of 1990 each contain provisions prohibiting compensation discrimination, including discrimination based on sex. Unlike the EPA, these laws do not require that two jobs be substantially equal, nor do they require that both be performed in the same establishment.

 

Examples of discriminatory compensation practices covered by these laws can include setting compensation for jobs predominantly performed by women lower than those predominantly performed by men, and compensation policies that have an adverse impact on women and that cannot be justified as job-related.

Does the State of Texas Require Equal Pay?

The Texas Equal Pay Act (TX Govt. Code Sec. 659.001) requires that all women employed by the state of Texas receive the same pay as men performing comparable work. The state does not currently have a comparable law requiring private employers to offer equal pay to men and women. However, the Texas Labor Code Section 21.051 prohibits discrimination based on race, color, disability, religion, sex, national origin, or age in connection with compensation.

 

For more information about equal pay requirements, visit