Despite the passing of the Equal Pay Act (EPA) more than a half-century ago, women and men America still have disparate pay grades. In March of this year, the Pew Research Center announced that in 2018, women earned 85 percent of what men earned, based on its analysis of full- and part-time median hourly earnings in the United States. (U.S. Census Bureau findings put women’s earnings closer to 80 percent of men’s.) Another way to look at it: On average, women only catch up to men’s earnings after an additional 39 days of work.
The EPA commands employers to pay women and men equally if their jobs are “substantially equal.” That job equality is measured in skill, effort, responsibility and working conditions within a single establishment. (Sometimes an establishment is only a single location as opposed to a company with several different places of operation, though there are exceptions.)
“It is job content, not job titles, that determines whether jobs are substantially equal.”
Skill is gauged by what experience, ability, education and training is required to perform the job. That is, not the skill possessed by the individual employee, but only the skill demanded by the job itself.
Effort encompasses physical and/or mental exertion. Physical effort can be clear-cut in certain industries involving manual labor; mental effort can be harder to measure, but needs to be analyzed.
Responsibility involves accountability. If the employee is trusted with more significant aspects of the business’s operations than other employees, then that might justify a pay disparity. But if two employees are each tasked with, say, handling confidential information or processing payments, then their pay should reflect that equality.
Working conditions include the physical location where the work is performed as well as the hazards therein.
In many cases, pay disparity may be the result of factors that are unrelated to the employees’ gender. If a male employee is paid more than a female employee based on something like merit, seniority or quantity of production, then the business is obligated to prove such “affirmative defenses.”
If gender disparity is discovered, the lower-paid employee should receive a raise; the company cannot lower the pay of an employee in order to comply with the EPA. Failure to comply with the EPA can result in compensatory and sometimes punitive damages.
Regardless of legal ramifications, a strong business with a healthy workforce will take equal pay into account. In some cases, gender-based pay disparity may occur unconsciously, or be the lasting result of some earlier unconscious bias. As with any business operation, these disparities should be identified and remedied in order to further the company’s success.
Now’s the time to look at your workforce and actively, consciously question whether you’re adhering to these EPA standards. Your HR specialists or your PEO should be able to easily break down your payroll figures so that you can conduct an analysis of payroll equality.