Pay or compensation discrimination occurs when employees performing similar work do not receive similar pay. Pay discrimination also occurs when a difference in pay has an unlawful 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 anti-discrimination laws. Relevant laws include Title VII, the ADA and ADEA, state anti-discrimination laws, and the Equal Pay Act which specifically addresses pay discrimination based on sex. This page will explain pay or compensation discrimination in more detail.
Pay/compensation discrimination occurs when employees performing substantially equal work do not receive the same pay for their work. 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, which are both prohibited under federal law. All forms of pay are covered by the 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.
For example, in 2017, women earned 82% of what men earned, according to a Pew Research Center analysis of median hourly earnings of both full- and part-time workers in the United States. Based on this estimate, it would take an extra 47 days of work for women to earn what men did in 2017.
Under the Equal Pay Act (EPA), a claimant “does not have to prove that two jobs are identical but rather must show that the “skill, effort and responsibility required in the performance of the jobs are substantially equal.” Arrington v. Cobb County, 139 F.3d 865, 876 (11th Cir. 1998).Work is “substantially equal” for purposes of the EPA if it requires “equal skill, effort, and responsibility.” 29 U.S.C. § 206(d)(l). This determination turns on the actual content of the job-not mere job descriptions or titles. EEOC v. Cent. Kan. Med. Ctr., 705 F.2d 1270, 1273 (10th Cir. 1983).
The law looks to many factors when determining whether or not pay/compensation discrimination has occurred. Each of these factors is summarized in categories below:
Differences in pay 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 based on 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 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.
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 based on 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.
Many states have enacted state laws prohibiting employers from discriminating against employees based on their sex. Most states have equal pay laws. Many explicitly prohibit gender-based compensation discrimination, and some are more expansive than the federal laws.
Some state discrimination laws also cover employers with fewer than 15 employees or provide additional protections beyond those provided by Title VII or the EPA. Further, several states have laws that prohibit company pay secrecy policies, including California, Maine, Nebraska, North Dakota, Oregon, South Dakota, and West Virginia. For example, the California Labor Code states that no employer may require, as a condition of employment, that an employee refrain from disclosing the amount of his or her wages or discipline, discharge, or otherwise discriminate against an employee who discloses the amount of his or her wages. This law was enacted to protect employees who wanted to discuss some aspect of their compensation with their coworkers, including possible increase in pay, perceived pay disparities, or the awarding of bonuses.
Additionally, New Jersey recently passed a bill that will be the nation’s strongest law to combat pay discrimination. The law increases the possibility that women can uncover pay discrimination, it strengthens the legal tools women can use when seeking justice, it expands the number of years of back pay a victim of pay discrimination can recover, and it deters companies from perpetuating wage discrimination. More specifically, the law allows victims to recover up to six years of back pay, takes away unfair employer defenses, and will only permit pay differences if the employer can show the difference was based on seniority, education and training, or merit.
The Equal Pay Act (EPA) and Title VII make it illegal to discriminate based on sex in the payment of wages or benefits. A more detailed explanation of the protections provided under the law can be found in the answers to question 1 and 2.
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 based on 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 regarding 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.
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.
The statute of limitations for filing an Equal Pay Act claim is two years from the date of the alleged unlawful compensation practice or, in the case of a willful violation, the statute of limitations is three years. The Lilly Ledbetter Fair Pay Act extends the statute of limitations for discriminatory compensation claims by clarifying “that a discriminatory compensation decision . . . occurs each time compensation is paid pursuant to the [discriminatory decision].” Pub. L. No. 111-2, 123 Stat. 5 (2009).
For more information on how to file a complaint, and how long you have to file, select your state from the map below or from this list.
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