Equal Pay and the Wage Gap: Where Are We Now?

August 20, 2019 | Insights

The Equal Pay Act of 1963 (EPA) has recently been in the press due to a lawsuit filed by 28 players from the U.S. National Women’s Soccer Team against the U.S. Soccer Federation. According to the lawsuit, filed on March 8, 2019 (International Women’s Day), the players on the U.S. National Women’s Soccer Team (USNWST) are paid significantly less than the U.S. National Men’s Soccer Team’s players—sometimes earning just 38% of what the men are paid per game.

The USNWST further alleges that in recent years, the women’s team has generated more profits and revenue for the U.S. Soccer Federation than the men’s team. The USNWST has also played more games than the men’s team and has larger viewing audiences. In addition to earning four Olympic gold medals, the USNWST has won four World Cup titles and has been one of the top three teams in every FIFA Women’s World Cup tournament. The men’s team has not placed in the Olympics since 1904 and has not advanced past the quarter-finals in the World Cup tournament since 1930. The men’s team also failed to qualify for the World Cup in 2018.

The U.S. Soccer Federation has denied that the women’s team is paid less than the men’s team, leading Molly Levinson, a spokesperson for the USNWST players involved in the lawsuit, to retort, “For every game a man plays on the [Men’s National Team], he makes a higher base salary payment than a woman on the [Women’s National Team]. For every comparable win or tie, his bonus is higher. That is the very definition of gender discrimination.”

While it is true that the sports world has seen a number of recent complaints from women athletes asserting that they are underpaid compared to their male counterparts, concerns regarding the pay gap between men and women extend into the overall U.S. labor market.

While it is true that the sports world has seen a number of recent complaints from women athletes asserting that they are underpaid compared to their male counterparts, concerns regarding the pay gap between men and women extend into the overall U.S. labor market. In 2017, the U.S. Census Bureau’s “2017 American Community Survey” revealed that women on average earn 79 cents for every dollar earned by a white, non-Hispanic male. The reported gap is greater for women of color—for example, according to the Survey, a Hispanic woman earns just 58 cents for every dollar earned by a white, non-Hispanic male, and an African-American woman earns 67 cents for every dollar a white, non-Hispanic male earns. The Institute For Women’s Policy Research recently reported that statistics show the pay gap between the sexes has slightly increased since the Survey was conducted. Although some argue that the pay gap statistics do not reflect non-discriminatory reasons that might explain the gaps, such as length of time spent in or away from the workforce, and specific occupations, it is clear that pay disparity promises to be a focus of the plaintiff’s employment bar and federal, state, and local enforcement agencies.

Overview of the EPA

The EPA was passed in 1963 with the idea that there should be “equal pay for equal work.” The EPA is part of the Fair Labor Standards Act and prohibits wage discrimination by public and private employers on the basis of sex. The EPA allows unequal pay if the difference is from a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or another factor other than sex. To prevail on an EPA claim, a plaintiff must allege all of the following:

  • the plaintiff was paid less than at least one employee of the opposite sex;
  • the jobs the plaintiff and the comparator employee performed required equal skill, effort, and responsibility; and
  • the plaintiff and the comparator employee performed the jobs under similar working conditions in the same establishment.

A plaintiff bringing an EPA claim does not have to prove the employer intended to discriminate against her on the basis of sex. The plaintiff need only show that the employer paid the plaintiff’s male comparators more for performing the same work. Further, while the statute of limitations for an EPA claim is two years (three years if the violation is willful), each paycheck the plaintiff receives restarts the time period that the plaintiff has to bring a claim.

The EPA is not the only law that makes it unlawful to pay men and women differently for equal work. Title VII of the Civil Rights Act of 1964 prohibits discrimination because of sex, which includes paying women less than men for doing the same work. With a Title VII claim, employees must first file a charge of discrimination with the Equal Employment Opportunity Commission (EEOC), whereas there is no administrative requirement under the EPA. Further, the EPA allows an automatic doubling of damages for a prevailing plaintiff. For example, if an employee has been paid $15,000 a year less than a man in the same department doing equal work, then the employee could recover $30,000 a year in damages, along with attorneys’ fees and costs. A successful plaintiff may recover damages under both the EPA and Title VII as long as the plaintiff does not receive duplicative relief for the same wrong. Damages are calculated to give each plaintiff the highest award to which she is entitled under either statute. In a class action lawsuit, these damages can add up quickly.

Further, the EEOC has recently turned its focus on pay discrepancies that adversely impact women and minorities and has revised the EEO-1 form accordingly. By September 30, 2019, employers that have at least 100 employees or that are federal contractors with at least 50 employees and a federal contract or subcontract valued at $50,000 or more must report wage information and total hours worked for all employees. This information must be broken down by race, ethnicity, and sex and organized into 12 proposed pay bands for each of the 10 EEO-1 job categories.

In a 2016 press release announcing the proposed rule requiring the reporting of pay data, former EEOC Chair Jenny Yang stated, “Collecting pay data is a significant step forward in addressing discriminatory pay practices.”

The reason the EEOC wants to collect this data is clear—the agency hopes to more easily identify pay gaps and investigate pay discrimination practices in the coming years.

What Can Employers Do to Identify and Address Pay Discrepancies?

Employers that are required to file an EEO-1 form should immediately review their pay information and begin working on completing the form before the September 30, 2019, deadline. Even employers with no EEO-1 filing requirements may want to conduct an internal audit of their own pay practices to determine whether any pay gaps exist that could be potentially actionable. Such an audit also allows employers to determine whether any pay gaps or discrepancies are justified by a legitimate, non-discriminatory reason, or if action must be taken to address problematic pay differences.

Employers may also want to consider implementing stronger policies that protect against workplace harassment and discrimination, as well as creating policies that are more family and parent-friendly, since women are more likely to be the primary caregivers for children and sick relatives. Such policies not only will create an environment that allows for more equality between men and women but also may decrease employee turnover and enable employers to win and retain top talent.

Meet Sarah

Sarah Mitchell Montgomery is an employment law attorney with substantial experience representing employers and management in complex cases involving employment discrimination, retaliation and unfair practices and related workplace and business disputes. Sarah regularly assists clients on challenging work-related issues, including high risk discipline and termination scenarios, managing leaves of absence, navigating issues raised by Title VII, the FMLA, the ADA, the ADEA, USERRA and workers’ compensation statutes, investigating allegations of harassment and discrimination, drafting and updating affirmative action plans, and creating and implementing effective and compliant employee-related policies and procedures. Outside her practice, Sarah serves as a Commissioner for the Town of Sunnyvale, Texas’s Planning and Zoning Commission, a Staff Quality and Recruitment Committee Member for the Sunnyvale Independent School District Strategic Planning Team, and a Trustee for First United Methodist Church in Downtown Dallas. Sarah is also a participant in the Texas Women’s Foundation’s Leadership Institute.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.