Pay or compensation discrimination occurs when employees performing similar work do not receive similar remuneration. Pay discrimination also occurs when a pay differential has an illegitimate basis such as race or sex. Pay discrimination based on an employee's membership in a protected category like race, disability, or sex, is prohibited by antidiscrimination laws. Relevant laws include Title VII, the ADA and ADEA, state antidiscrimination laws, and the Equal Pay Act which specifically addresses pay discrimination on the basis of sex. This page will explain pay or compensation discrimination in more detail.
Pay discrimination (also known as compensation discrimination) occurs when employees performing otherwise substantially equal work do not receive the same pay, or remuneration, for their effort. It is job content and not job titles that determine whether or not jobs are substantially equal. Federal law looks to see that individuals performing jobs that require substantially equal skill, effort, responsibility, and under similar working conditions are compensated equally for their time. Discrimination can occur due to sex or race for example; federal law prohibits pay discrimination in both of these situations. All forms of pay are covered by law, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.
The law looks to a number of factors when determining whether or not pay or compensation discrimination has occurred. Each of these factors is summarized below and each category of the analysis must be substantially similar in order for a plaintiff to successfully bring a claim based upon pay or compensation discrimination:
Pay differentials are permitted when they are based on seniority, merit, quantity or quality of production. These are known as affirmative defenses and it is the employer’s responsibility to prove that they apply.
Title VII, ADEA, and ADA prohibit compensation discrimination on the basis of race, color, religion, sex, national origin, age, or disability. Unlike the EPA, there is no requirement that the claimants job be substantially equal to that of 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.
Compensation discrimination under Title VII, the ADEA, or the ADA can occur in a variety of ways. For example:
Note that there are separate laws protecting employees of federal contractors from pay discrimination:
For more information on pay discrimination as applicable to federal contractors and their employees see our federal contractor’s page.
Title VII covers all private employers, state and local governments, and educational institutions that employ 15 or more individuals. These laws also cover private and public employment agencies, labor organizations, and joint labor management committees controlling apprenticeship and training.
Many state laws also make it illegal to discriminate on the basis of sex. For more information, please see our page on the minimum number of employees needed to file a claim under your state law.
The law's protections apply to both current workers and job applicants. If you are a current employee and are fired, not promoted, or not accommodated due to your sex or gender, you are protected. If you are not hired due to your sex or gender, you are also protected.
5. Can an employer pay me less because I'm a woman? Can I be paid less because I'm a man?
The Equal Pay Act (EPA) makes it illegal to discriminate on the basis of sex in the payment of wages or benefits. The laws against discrimination in compensation cover all forms of compensation, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.
The EPA 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 the content of the job, not job titles, that determines whether jobs are substantially equal. Unlike the EPA, Title VII does not require that the job of the person claiming discrimination be substantially equal to that of a higher paid person of the other sex, nor does Title VII require the person claiming discrimination to work in the same establishment as the higher paid person. However, Title VII, unlike the EPA, requires proof of intent to discriminate on the basis of sex, while the EPA does not require proof of discriminatory intent.
Under the EPA, employers are prohibited from paying unequal wages to men and women who perform jobs that require substantially equal skill, effort and responsibility, and that are performed under similar working conditions within the same establishment. The law defines these terms as follows:
While there are some differences between Title VII and the Equal Pay Act, these federal laws are enforced by the same administrative agency, the Equal Employment Opportunity Commission (EEOC).
Employers are not allowed to condition benefits available to employees and their spouses and families on whether the employee is the “head of the household” or “principal wage earner” in the family unit, since that status bears no relationship to job performance and discriminatorily affects the rights of female employees.
An employer cannot make benefits available:
It is also against the law for an employer to have a pension or retirement plan which establishes different optional or compulsory retirement ages based on sex, or which differentiates in benefits on the basis of sex.
Victims of pay discrimination can recover remedies to include:
Remedies also may include payment of:
An employer may be required to post notices to all employees addressing the violations of a specific charge and advising them of their right to be free of discrimination, harassment, and retaliation. If necessary, such notices must be accessible to persons with visual or other disabilities that affect reading.
The employer also may be required to take corrective or preventive actions with regard to the source of the discrimination and minimize the chance it will happen again, as well as discontinue the specific discriminatory practices involved in the case.
Your state law may allow for greater or different remedies than federal law.
Yes, It is 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. See our page on Discrimination Retaliation for more information about anti-retaliation laws.
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