Equal Pay Act of 1963

What Is the Equal Pay Act of 1963?

The Equal Pay Act of 1963 is a U.S. regulation that prohibits employers from paying totally different wages to women and men who work beneath comparable circumstances and whose jobs require the identical degree of talent, effort, and accountability. It’s a part of the amended Honest Labor Requirements Act of 1938. The act was an essential milestone in gender equality, although after all wage gaps by gender persist.

Key Takeaways

  • Employers should give women and men the identical pay and advantages when their jobs are considerably equal.
  • Once they don’t, workers can file a lawsuit and doubtlessly obtain again pay, a pay adjustment, and reimbursement of authorized charges.
  • Employers have 4 fundamental defenses to Equal Pay Act claims; these defenses have been interpreted in numerous methods by totally different courts.

Understanding the Equal Pay Act of 1963

Based mostly on the precept of equal pay for equal work, the Equal Pay Act applies to all types of compensation. Wage, wages, time beyond regulation, bonuses, and advantages all think about, as do inventory choices, profit-sharing plans, trip and vacation pay, automobile allowances, and expense reimbursements.

The U.S. Division of Labor performed research earlier than the act was handed and located that males have been incomes greater than girls for a similar job in some industries. One key discovering, based on reporting by The New York Instances, was that some girls have been incomes $8 to $20 much less per week than males for a similar workplace work. In 2021 {dollars} that’s about $70 to $180 per week or about $3,600 to $9,400 per 12 months. As famous by the Instances, feminine faculty graduates have been incomes considerably lower than their male counterparts.

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Congress handed the Equal Pay Act in Might of 1963, and President Kennedy signed it into regulation on June 10. The act states that gender-based pay discrepancies depress workers’ pay and residing requirements, hold labor assets from being maximized, trigger labor disputes that disrupt enterprise, burden commerce and the free move of products, and are a type of unfair competitors. The regulation went into impact for many employers one 12 months later.

The Equal Employment Alternative Fee is answerable for imposing the Equal Pay Act.  The Division of Labor is allowed to enter and examine companies and their information, examine and collect knowledge, and communicate with workers to see if an employer has violated the act or to verify an employer is complying with the act. The federal authorities can ask state and native companies to assist with such efforts and reimburse them for such providers.

Employers topic to the Equal Pay Act should hold information of their workers and their wages, hours, and dealing circumstances.

Advantages of the Equal Pay Act

When employers violate the Equal Pay Act, workers can file a lawsuit and doubtlessly be awarded again pay, a pay adjustment, and reimbursement of authorized charges. Pay discrimination lawsuits that workers have received primarily based on the Equal Pay Act illustrate methods the act has helped employees. Listed here are just some examples.

In 1970, AT&T labored out a settlement with the federal authorities, agreeing to pay $15 million in again wages, largely to girls, and $30 million to future pay changes. A second decree was issued, and AT&T needed to pay one other $30 million to rectify pay discrimination amongst roughly 25,0000 managers. The settlement additionally required AT&T to overtake its processes for figuring out salaries.

A couple of years later, in 1974, feminine flight attendants received again pay and curiosity in a lawsuit towards Northwest Airways for being paid lower than males for a similar work and for being required to share resort rooms with one another on layovers whereas males acquired their very own rooms.

A category-action lawsuit in 1997 resulted in a settlement for which Dwelling Depot agreed to pay $65 million to 25,000 girls who stated the corporate had discriminated towards them relating to pay, promotions, hiring, and job assignments. The corporate additionally agreed to cowl the ladies’s authorized charges and implement improved human assets practices.

Extra lately, the regulation has helped empower girls to carry pay discrimination lawsuits towards Goldman Sachs, Google, and Oracle.  Whereas the Goldman Sachs and Oracle instances are nonetheless unfolding, in June 2022, Google agreed to pay $118 million to resolve the California state court docket class motion introduced on behalf of over 15,000 feminine former workers.

Eliminating discrimination primarily based on sexual orientation or gender identification and selling pay fairness are priorities of the Ladies’s Bureau of the U.S. Division of Labor beneath the Biden administration.

Criticisms of the Equal Pay Act

The American Bar Affiliation has recognized a number of the explanation why the Equal Pay Act has not achieved its targets. For instance, gender discrimination is tough for workers to show, and the penalty of again pay, elevated wages, and legal professional’s charges for an worker who wins a lawsuit shouldn’t be a ample deterrent for employers. Some court docket choices have undermined the regulation. And the regulation’s definition of “institution” is just too slim, on condition that employers could have many locations of enterprise (to not point out workers who do business from home).

In 2021, proposed laws known as the Paycheck Equity Act, handed by the Home of Representatives however failing to get to the ground of the Senate, tried to treatment the Equal Pay Act’s shortcomings and make higher progress towards rectifying revenue inequality. This act and comparable laws have been launched with out changing into regulation in earlier years.

Does the Equal Pay Act of 1963 Apply to Nonbinary, Agender, and Transgender People?

Although the language of the Equal Pay Act refers to ladies and men, employers shouldn’t assume that this language would shield them towards a pay discrimination lawsuit introduced by an worker with a unique gender identification.

How Do Employers Defend Themselves Towards Claims of Unequal Pay?

Employers have 4 authorized defenses towards unequal pay, and these defenses have been interpreted in numerous methods by totally different courts.

  1. Seniority
  2. Benefit
  3. Amount or high quality of labor
  4. A distinction primarily based on one other issue that isn’t gender

Employers may shield themselves with employment practices legal responsibility insurance coverage (EPLI) and pay fairness audits.

How Can Staff Struggle Again Towards Unequal Pay?

Staff have two years to file a lawsuit towards an employer for violating the Equal Pay Act. The statute of limitations is three years if the employer deliberately violated the act. Staff who assume they’ve been paid much less due to their gender could file a declare beneath the Equal Pay Act, Title VII of the Civil Rights Act, or each. Staff can also be lined by state legal guidelines that could be stronger than federal ones.