Equal Pay Act of 1963

The Equal Pay Act (EPA) was instituted in 1963 and was intended to prevent sex discrimination in wages. It is part of a larger architecture of fairness in wages known as the Fair Labor Standards Act (FLSA). This entry will not cover FLSA, but good reviews of FLSA by Cristina Banks and Lisa Cohen, as well as Arthur Gutman, are available to the interested reader. The EPA is one of the few employment statutes that identifies a single protected class (i.e., gender, although age is another protected category). The act permits unequal pay for men and women if any of the following foundations are used to determine pay: (a) bona fide seniority systems, (b) merit-based pay systems, (c) a pay system that uses quantity or quality of production as a basis for allocating wages, or (d) a system of allocation based on any factor other than sex of the employee. The act further prohibits an employer from lowering the wages of one employee group (i.e., men) to eliminate a wage differential between men and women. The act covers all employers, in both the private and public sectors, and an EPA claim can be applied to a workforce as small as two, as long as one is a man and the other a woman.

The EPA ushered in a new era of antidiscrimination laws applied to the workplace. Although initially the EPA was administered by the Department of Labor, the administration is now the responsibility of the Equal Employment Opportunity Commission (EEOC). During the period from 1992 to 2003, 1,200 claims on average were filed annually under the EPA statute, representing approximately 1% of all charges filed with the EEOC. Although this number may not seem substantial in a relative sense, the problem can be quite expensive from an absolute perspective. In part, this expense occurs because correcting the problem requires raising the lower salary rate and considering not only back pay, but also interest and denied salary [Page 211]increases. As an example, Texaco paid $3.1 million to underpaid female employees. Suits may be filed directly by an individual, by a class of claimants, or on behalf of an individual or a class by the EEOC. Violations considered to be willful or intentional often result in considerably greater monetary awards than those considered unintentional. Gutman has suggested that willfulness or intentionality might simply be construed as whether or not the employer was even aware of the existence of the EPA or the FLSA. This is a rather low threshold for the definition of willfulness. A more reasoned definition of willfulness might be that the employer knew or had reason to know that its compensation practices were in violation of the EPA.

The essence of the EPA is a determination of whether women are being paid less for substantially equal work done by men. This does not necessarily require that men and women have the same job titles. The definition of equal work is derived from four factors:

• Equal skill required: equal experience, training, education, and ability
• Equal effort required: equal physical and mental exertion
• Equal responsibility: equal accountability and supervisory duties
• Equal working conditions: equal physical surroundings and hazards

If there are substantial differences in any of these categories, the jobs are not considered equal for purposes of the EPA, although if there are minor differences, unequal pay could not be justified. An example of a typical EPA challenge was the case Laffey v. Northwest Airlines. The charge was that male “pursers” were paid more than female “stewardesses” (who would now be called flight attendants), even though both performed basically equal work.

...