Tag Archives: equal pay act

Changes in the Air – Employers Considering Prior Salary When Setting Wages Need to Know the Applicable Laws

Contributed by Michael Wong, April 18, 2018

The Equal Pay Act can create significant exposure for employers, if not considered when setting female employees’ wages – especially if you are relying upon a female applicant’s prior salary history and there is a difference in the pay of similar male employees.

33186296 - wage gap concept with blue figure symbolizing men and red pawn women

Wage gap concept with blue figure symbolizing men and red symbolizing women

The Equal Pay Act is dangerous for employers because plaintiffs are not required to prove discriminatory intent by the employer. All a plaintiff must show is that there is a wage disparity for equal work requiring the same skill, effort and responsibility, which is performed under similar working conditions. Once a plaintiff establishes that, the burden shifts to an employer to establish that the difference is based on one of the following four statutory exceptions:

  • a seniority system;
  • a merit system;
  • a system which measures earnings by quantity or quality of production; or
  • a differential based on any other factor other than sex.

Historically, the Equal Employment Opportunity Commission (EEOC) and the federal Appellate Courts for the Second (Connecticut, New York and Vermont), Eighth (Arkansas, Iowa, Minnesota, Missouri, Nebraska, South Dakota and North Dakota), Tenth (Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming) and Eleventh (Alabama, Florida, and Georgia) Circuits have taken the position that employers may consider prior salary as a mix of factors to set female employee wages without violating the Equal Pay Act – but prior salary cannot be the sole factor for any wage differential with a male employee in a similar role. On the other hand, the Seventh Circuit (Illinois, Indiana and Wisconsin) has held that using prior salary alone is a basis other than sex for wage differential that does not violate the Equal Pay Act.

Recently, the U.S. Court of Appeals for the Ninth Circuit (California, Alaska, Arizona, Hawaii, Idaho, Montana, Nevada, Oregon and Washington) took its prior decisions a step farther by finding that prior salary does not fit within the exception of a factor other than sex because it is not a legitimate measure of work experience, ability, performance, or any other job-related quality. In doing so, the Ninth Circuit held that allowing employers to consider prior salary would simply continue the gender-based assumptions and discrimination that the Equal Pay Act was intended to stop.

This recent decision falls in line with the increasing number of state and local laws being passed that prohibit employers from asking applicants for prior salary information. States and cities/municipalities that currently have laws prohibiting employers from requesting/considering prior salary information include the following:

  • California (all employers)
  • Massachusetts (all employers)
  • Oregon (all employers)
  • Delaware (all employers)
  • New York (state employers)
  • New Jersey (public employers)
  • Puerto Rico (all employers)
  • San Francisco (all employers)
  • New Orleans (city positions)
  • New York City (all employers)
  • Albany County, New York (all employers)
  • Philadelphia (all employers – currently subject to legal challenge)
  • Pittsburgh (city positions).

With these changes you need to be aware of the laws impacting your operations and if you want to request and/or consider prior salary history when setting wages. If you are not sure, seek legal counsel in reviewing your employment practices.

 

EEOC Actively Enforces Equal Pay Violations

Contributed by Jonathon Hoag, November 28, 2017

The EEOC’s Strategic Enforcement Plan (SEP) for Fiscal Years 2017-2021 identified “Equal Pay” as a priority area that demands focused attention. The EEOC’s recent press releases show it is actively fulfilling this strategic mission.

gender equality

Gender equality scale

In the third scenario, the EEOC obtained a judgment against a pizza restaurant for violating the Equal Pay Act. Two high school friends-one male and one female-applied to be “pizza artists” and both were hired. However, the female applicant received $0.25 less an hour in starting pay. When she realized this discrepancy, she contacted the restaurant to complain. In response, the restaurant withdrew the offers of employment to both individuals. The EEOC’s attorney referenced the vast amount of recent news related to sexual harassment and stated unequal pay is simply another form of sex discrimination in the workplace. Further, the EEOC stressed that it will continue to thoroughly investigate and enforce equal pay requirements.

Bottom Line

The overwhelming media coverage of sexual harassment and unequal treatment in the workplace reinforces that employers must make equal treatment a top priority. Periodic review of policies and practices, with attention to pay policies, remains critical to limit employer exposure to lawsuits alleging unequal pay or treatment.

Illinois Employment Law Update – Fall 2012

Contributed by Jeff Risch

As the Chair of the Illinois Chamber’s Employment Law & Litigation Committee, I want to make certain that our readers receive the latest changes and updates courtesy of Springfield.  Be assured that our labor group continues to be on the frontline on key local, state and federal workplace regulation. 

Social Networking Limits (HB 3782):  This measure provides that it is unlawful for an employer to request a password or other account information in order to access an employee’s or prospective employee’s social networking website.  HB 3782 allows for employers to maintain lawful workplace policies regarding internet use, social networking site use and electronic mail use.  This legislation allows employers to obtain information about an employee or prospective employee in the public domain.  Governor Quinn has signed this legislation as Public Act (PA) 97-875.  It is effective January 1, 2013.

Equal Pay Act – Individual Liability (SB 2847):  As amended, individual liability under the Equal Pay Act occurs when the employer knowingly and willfully evades the payment of a final award or final judgment under the Act.  Effective on January 1, 2013, the Governor signed as PA 97-903.

Service Members Protections (SB3287):  This measure creates the Illinois Service Member Civil Relief Act which provides certain legal protections afforded to service members (and family members where specified) are subject to stated provisions of law. Amends the Illinois Administrative Procedure Act to set forth a provision concerning stays of contested case hearings for service members.  Amends the Illinois Human Rights Act to provide that a violation of specified provisions regarding legal protections for military personnel constitutes a civil rights violation under the Illinois Human Rights Act.  This is now PA 97-913, with an effective date of January 1, 2013.

Employment Discrimination (HB 3915):  Changes the term “handicapped” under the Illinois Human Rights Act to “disability”.  NOTE: We can expect that the ADA (as amended) will continue to be relied on as highly persuasive authority in interpreting employers’ obligations related to disability protections under the IHRA. Governor Quinn signed as PA 97-877 with an August 2, 2012 effective date.

Prevailing Wage Notice (HB5212):  Provides that a public body or other entity shall notify contractors and subcontractors of changes in prevailing wage rates.  However, the notification requirement will be met by including in the contract that the prevailing rate is established by the Department of Labor and available on the IDOL website — shifting the responsibility yet again on the contractor and small business owner.  Effective January 1, 2013 as PA 97-964.

UI Administrative Changes (HB 5632):  Has been signed into law as PA 97-791 and goes into effect January 1, 2013.  The new law cleans up obsolete language and makes other non-substantive changes.  It requires payments be made to the Department of Employment Security instead of the Director.  It addresses several federal conformity issues including:

  1. Illinois law now provides for a monetary penalty for individuals who fraudulently obtain UI benefits that are greater than 15 percent of the amount that was fraudulently obtained.
  1. Illinois law now requires an employer account to be charged for benefits that were incorrectly paid if the incorrect payment was the result of the employer (or employer’s agent) failing to timely respond to information requests from the state UI agency and the employer (or agent) has established a pattern of failing to timely respond.
  1. Illinois law now requires employers to report to the state new hire directory the names of all employees rehired after having been separated for at least 60 days.