Not cool. On its face that violates the Equal Pay Act. The Equal Pay Act is a federal law that states employees of one sex must be paid the same as employees of the opposite sex for the same job. Here it is in legalese:
No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions . . . .
29 U.S.C. § 206(d)(1). Perhaps your boss thinks that the jobs are not actually equal. A lot of employers try to make that argument. These employers point to granular differences in the job to claim they are not equal. For example, recently, the University of Oregon tried to argue that tenured psychology professors did not perform work under similar conditions that required equal skill, effort, and responsibility because these professors taught different classes, oversaw different doctoral students, and managed different centers with funding from different sources. Freyd v. Univ. of Oregon, 990 F.3d 1211, 1221 (9th Cir. 2021). The 9th Circuit rejected that argument, saying all that is required a common core of tasks. Id. at 1220-21. If you want more details on this important case, I wrote a blog about it back in April 2021. See https://www.texasemploymentlawyer.com/2021/04/freyd-v-university-of-oregon-what-does-equal-work-mean-under-the-equal-pay-act/.
But less assume that is not what your boss is basing the decision on because the jobs are equal. If that is the case, then your boss must justify the unequal through one of the four affirmative defenses provided by the EPA. An affirmative defense is most commonly a legal excuse. When a party to a lawsuit asserts an affirmative defense, that party is often admitting that it engaged in the conduct alleged, but argues that it was legally justified, permissible, or excused. IN the Equal Pay Act context, the employer is saying, yes my company pays the sexes differently for the same work, but that’s ok.
So, what are these affirmative defenses that allow unequal pay for the sexes?
Unequal pay may be permissible if the unequal pay “is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.” 29 U.S.C. § 206(d)(1). These affirmative defenses are narrowly construed.
Importantly, whichever affirmative defense is asserted must actually explain the wage gap. In other words, the existence of one the systems or factors is not enough in and of itself to allow unequal pay. For example, if a company claims that it uses a seniority system to determine pay, then that seniority system must explain the wage gap between a man and woman performing the same work. If both have equal seniority or one has more than the other, then their respective pay must reflect that.
Regarding merit systems and systems based on the quantity/quality of production, these systems must be based on predetermined criteria that is communicated to the employees. It is not enough for an employee to merely be aware that such a system exists. Numerous cases have held that employees must know the contents of that system, which makes complete sense. Simply knowing that a merit system or production system exists without knowing what the company considers in determining merit or production is pretty useless and would lead to highly subjective decisions, which are not permitted. Additionally, these systems must be objectively and systematically administered by the employer. In other words, the criteria cannot be selectively applied.
Regarding factors other than sex, these must be bona fide factors other than sex that are actually used to make pay decisions. Here is how the Seventh Circuit put it, “The factor other than sex must also be bona fide. In other words, an employer cannot use a gender-neutral factor to avoid liability unless the factor is used and applied in good faith; it was not meant to provide a convenient escape from liability.” Fallon v. State of Ill., 882 F.2d 1206, 1211 (7th Cir. 1989).
There is a lot more to each of these affirmative defenses, but the key takeaway is that the affirmative defenses are narrowly construed and must meet certain standards and factors to be valid. If you believe that you are not receiving equal pay for equal work, you should contact an employment law attorney to discuss your case.