Pay Equity: Legislative and Legal Developments – Benjamin Collins, Analyst in Labor Policy; Jody Feder, Legislative Attorney. November 22, 2013

“The term “pay gap” refers to the difference in earnings between male and female workers. While the pay gap has narrowed since the 1960s, female workers with a strong attachment to the labor force earn about 77 to 81 cents for every dollar earned by similar male workers. Studies have analyzed the earnings and characteristics of male and female workers and found that a substantial portion of the pay gap is attributable to non-gender factors such as occupation and employment tenure. Some interpret these studies as evidence that discrimination, if present at all, is a minor factor in the pay gap and conclude that no policy changes are necessary. Conversely, advocates for further policy interventions note that some of the explanatory factors of the pay gap (such as occupation and hours worked) could be the result of discrimination and that no broadly accepted methodology is able to attribute the entirety of the pay gap to non-gender factors. The Equal Pay Act (EPA), which amends the Fair Labor Standards Act (FLSA), prohibits covered employers from paying lower wages to female employees than male employees for “equal work” on jobs requiring “equal skill, effort, and responsibility” and performed “under similar working conditions” at the same location. The FLSA exempts some jobs (e.g., hotel service workers) from EPA coverage, and the EPA makes exceptions for wage differentials based on merit or seniority systems, systems that measure earnings by “quality or quantity” of production, or “any factor other than sex.” The “equal work” standard embodies a middle ground between demanding that two jobs either be exactly alike or that they merely be comparable. The test applied by the courts focuses on job similarity and whether, given all the circumstances, they require substantially the same skill, effort, and responsibility. The EPA may be enforced by the government, or individual complainants, in civil actions for wages unlawfully withheld and liquidated damages for willful violations. In addition, Title VII of the 1964 Civil Rights Act provides for the awarding of compensatory and punitive damages to victims of “intentional” wage discrimination, subject to caps on the employer’s monetary liability. The issue of pay equity has attracted substantial attention in recent Congresses. A number of measures, including bills that would provide additional remedies, mandate “equal pay for equivalent jobs,” or require studies on pay inequity, have been introduced in each of the last several congressional sessions. These bills include the Paycheck Fairness Act (H.R. 377/S. 84) and the Fair Pay Act (H.R. 438/S. 168) in the 113th Congress. This report also discusses pay equity litigation, including Wal-Mart Stores v. Dukes, a case in which the Supreme Court rejected class action status for current and former female Wal-Mart employees who allege that the company has engaged in pay discrimination.”