Equal Pay Act, Title VII, and other Pay Equity Laws You Should Know

In 1963, women in the United States earned 59 cents for every dollar a man earned. The Equal Pay Act aimed to close that gap, with Title VII of the Civil Rights Act coming shortly thereafter to mandate equal pay for additional protected classes. 

Nearly 60 years later, the wage gap persists, though it's narrowing. Women now earn 83 cents for every dollar earned by men, though some communities fare worse. Native women earn 50 cents and Latinas earn 49 cents for every dollar white men earn.

Federal, state, and local pay equity laws have continued to emerge over the years to address the wage gap and its root problems. Here are some of the laws you should know.

The Equal Pay Act of 1963

The Equal Pay Act (EPA) requires that men and women in the same establishment be given equal pay for substantially equal work. That is, when their jobs require substantially equal skill, effort, and responsibility under similar working conditions. 

This includes all forms of pay:

• 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
• Benefits

The EEOC stipulates that equal wages must be paid in the same form. In an example, they share, “An employer cannot pay a higher hourly wage to a male employee and then attempt to equalize the difference by periodically paying a bonus to a female employee.”

If a pay discrepancy is found, employers may not reduce any employee’s pay to equalize compensation. 

Workers may file an EPA charge with the U.S. Equal Employment Opportunity Commission (EEOC) or go to court within two years of the unlawful compensation practice. This extends to three years with willful violation. Violations led the EEOC to award $14 million in monetary benefits in 2021 alone.

Title VII of the 1964 Civil Rights Act

Title VII protects workers from employment discrimination based on race, color, religion, sex, and national origin. This includes compensation discrimination. 

The EEOC shares, “Unlike the EPA, there is no requirement that the claimant's 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.” 

Workers may file a charge under Title VII within 180 days.

Age Discrimination in Employment Act of 1967

The Age Discrimination in Employment Act (ADEA) protects applicants and employees who are 40 or older from employment discrimination based on age. This includes compensation, benefits, and promotions. Employers may, however, favor older workers based on age, even when a younger worker or is 40 or older would be adversely affected.

Workers may file a charge under ADEA within 180 days.

Title I of the Americans with Disabilities Act of 1990

The Americans with Disabilities Act (ADA) protects qualified individuals with disabilities from employment discrimination. The law also protects people from discrimination based on their relationship with a person with a disability. This extends to every aspect of employment, including compensation, benefits, and promotions.

The ADA also requires employers to provide reasonable accommodations, unless it would cause undue hardship, but may not reduce compensation to make up for the cost of those accommodations.

Workers have 180 days to file a charge under the ADA.

Lilly Ledbetter Fair Pay Act

The Lilly Ledbetter Fair Pay Act allows workers to file wage discrimination lawsuits within 180 days of their last discriminatory paycheck. This legislation nullified a Supreme Court decision that action could only be taken within 180 days of the first unequal paycheck.

This extends employer liability and underscores the importance of considering pay equity with every compensation decision. 

State and local pay equity laws

As more companies embrace remote work, it’s becoming increasingly important to stay on top of state and local pay equity laws. 

For example, California’s new pay transparency law goes into effect on January 1, 2023. Companies with California employees must share salary range information with current and prospective employees, include salary information in job postings, and maintain detailed pay records. Additionally, they may not ask candidates for salary history or use salary history information to create job offers.

Colorado, Pennsylvania, and Maryland have similar pay equity laws:

• Colorado employers must disclose compensation and benefits in job postings, announce opportunities for promotion to all employees, and allow employees to discuss compensation. They may not ask for a candidate's salary history. 
• Pennsylvania prohibits asking a candidate for salary history and requires job postings to disclose the pay scale.
• Maryland has implemented salary history bans and requires employers to furnish salary bands upon an applicant request.

Final thoughts on pay equity laws

In the United States, workers are protected from compensation discrimination on the basis of race, color, religion, sex, national origin, age, and disability. Still, the wage gap persists within these protected groups. This is a multi-faceted problem that requires a multi-faceted solution.

Salary history bans, increased pay transparency, and accountability are all playing a role in closing the gap. As these solutions continue to show promise, pay equity laws will continue to evolve so we can continue to work toward equal pay for equal work.