What Is the Equal Pay Act?

Before 1963, wage and employment decisions were frequently made on the basis of sex, marital status, and other factors that did not measure merit. Newspapers even wrote separate columns segregating help-wanted ads for men and women. 

According to the National Committee on Pay Equity, in 1963, “women who worked full-time, year-round made 59 cents on average for every dollar earned by men.” That’s only slightly more than half of the wages men receive. Without specific wage regulations, women frequently fell victim to wage discrimination.

The Fair Labor Standards Act (FLSA) of 1938 covered minimum wage and overtime pay regulations, but did not amend the Equal Pay Act until 1963. 

What Is The Equal Pay Act (EPA)?

Enforced by the U.S. Equal Employment Opportunity Commission (EEOC), The Equal Pay Act of 1963 bans sex-based wage discrimination between men and women. It applies when comparing male and female employees at the same establishment who work jobs that require the same skills, effort, and responsibility. Besides wage, the act also mandates that employers give men and women the same benefits for equal work. These include:

• Overtime and bonuses

• Stock options

• Profit-sharing plans

• Hotel allowances 

• Reimbursements 

• Vacation and holiday pay

• Life insurance

• Health benefits

Although gender wage gaps certainly still exist, the EPA has worked to gradually narrow that gap.

What Should HR Know About the Equal Pay Act? 

An employee can claim that an employer violates the EPA by demonstrating where men are paid more than women for the same work at the same location. According to the EEOC, to avoid liability an employer must prove that the pay disparity is justified. Acceptable justifications include:

• Compensation rewards based on length of service

• Compensation rewards based on performance 

• Incentive pay based on work quality or amount of work performed 

• Factors related to job performance or business operations, like shift differentials for less popular shifts

The DOL also lists a strict ban on reducing the wages of other individuals to equalize pay. Pay may be increased to equalize pay between men and women, but an employer cannot reduce a man’s wage for the sole purpose of making it equal to a woman’s wage, or vice versa. 

What Are the Penalties for Violating the Equal Pay Act?

Willfully violating the EPA can subject the employer to a fine of up to $10,000 or even imprisonment for a willful secondary violation. The employer will also be liable to the employee or employees affected in the amount of their unpaid wages, an equal amount as liquidated damages, and reimbursement of legal fees. 

Pay discrimination also occurs on the basis of race, color, age, disability, religion, or national origin. Other federal statutes like Title VII of the 1964 Civil Rights Act, The Age Discrimination in Employment Act (ADEA), and The Americans with Disabilities Act (ADA) are important to be aware of when determining pay.

Additional Resources

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