The right of employees to be free from discrimination in their compensation is protected under several federal laws, including the following enforced by the U.S. Equal Employment Opportunity Commission (EEOC): the Equal Pay Act of 1963, 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.
- The Equal Pay Act requires that men and women be given equal pay for equal work in the same establishment. The jobs need not be identical, but they must be substantially equal. It is job content, not job titles, that determines whether jobs are substantially equal.
Pay differentials are permitted when they are based on seniority, merit, quantity or quality of production, or a factor other than sex. These are known as “affirmative defenses” and it is the employer’s burden to prove that they apply.
In correcting a pay differential, no employee’s pay may be reduced. Instead, the pay of the lower paid employee(s) must be increased.
LEDBETTER FAIR PAY ACT 2009
The Ledbetter Fair Pay Act* signed into law by President Obama on January 29, 2009, reinstated the EEOC’s longstanding position on the timeliness of filing pay discrimination charges, a position that had been overturned by the Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc. The Act helps to ensure that workers have a fair chance of bringing claims against their employers to hold them liable for unfair pay.
In May 2007 in Ledbetter v. Goodyear Tire & Rubber Co., the Supreme Court ruled that employees who claimed intentional pay discrimination had to file an administrative charge of discrimination within 180 or 300 days (depending on state law) of the original discriminatory act — not 180 or 300 days of their last discriminatory paycheck.
Specifically, the Court ruled that Lilly Ledbetter, the only female supervisor at a Goodyear tire plant, did not file her lawsuit in time because it concerned pay disparities based on discriminatory decisions made many years earlier.
The Ledbetter decision thus made it easier for employers to defend against workplace discrimination claims based on long-ago decisions about salary and raises.
The Ledbetter Fair Pay Act states that the Supreme Court’s 2007 decision is “contrary to the intent of Congress” because it “significantly impairs statutory protections against discrimination in compensation that Congress established and that have been bedrock principles of American law for decades.”
The Act states that with respect to pay discrimination, an unlawful employment practice occurs “each time wages, benefits, or other compensation is paid, resulting in whole or in part from [a pay] decision or other practice.”
This Act is intended to overturn the holding of Ledbetter by clarifying that:
[A]n unlawful employment practice occurs, with respect to discrimination in compensation, … when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.
The Act does still limit such liability, as it limits the recovery of back pay to “two years preceding the filing of the charge, where the unlawful employment practices that have occurred during the charge filing period are similar or related to unlawful employment practices with regard to discrimination in compensation that occurred outside the time for filing a charge.”
The Act also applies to age and disability discrimination, which had not been directly impacted by the Ledbetter decision because covered under statutes other than Title VII.
Title VII, ADEA, and ADA
Title VII, the ADEA, and the ADA prohibit compensation discrimination on the basis of race, color, religion, sex, national origin, age, or disability. Unlike the EPA, there is no requirement under Title VII, the ADEA, or the ADA that the claimant’s job be substantially equal to that of a higher paid person outside the claimant’s protected class, nor do these statutes require the claimant to work in the same establishment as a comparator.
Pay discrimination under Title VII, the ADEA, or the ADA can occur in a variety of forms.
It is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on compensation or for filing a discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under Title VII, ADEA, ADA or the Equal Pay Act.
(* Please consult an attorney regarding the time limits of your specific circumstances and potential claim)