Unequal Pay for Women Adds Up, Especially for Minority Women

It is illegal under state and federal laws to pay an employee less compensation because of his or her sex. Overall, women make less money than men in the United States. How much and why is disputed, but it is not disputed that employers cannot set pay rates based on an employee’s sex.

Under the federal Equal Pay Act (EPA), men and women must be given equal compensation for equal work by the same employer or location of work. How are jobs judged as equal under federal equal pay law?

• The jobs at issue need not be identical, but they must be substantially equal.
• Job duties, not titles, are looked at to determine whether jobs are substantially equal.

Employers may not pay unequal compensation to men and women who perform jobs that require substantially equal skill, effort, and responsibility and that are performed under similar working conditions within the same establishment.

• Skill: Skill is measured by the experience, ability, education, and training needed to do the job. At issue are the skills required for the job, not the skills the individual employees have.
• Effort: Effort is the physical or mental exertion needed for the job. If different jobs require different levels of effort it would not violate the law if levels of compensation are different (as long as the assignment to higher-paying jobs is not motivated by the employee’s sex).
• Responsibility: Responsibility is the level of accountability needed to perform the job.
• Working conditions: These conditions include physical surroundings (temperature, noise, fumes, or ventilation) and workplace hazards.
• Establishment: The EPA prohibits compensation discrimination for jobs within an establishment, which is a distinct physical place of business rather than an entire business or enterprise consisting of several places of business. Depending on the circumstances, places of business located in different areas may be treated as one establishment. If a central office hires employees, sets compensation, and assigns employees to different work locations, those work sites could be part of one establishment.

Compensation includes all payments to or on behalf of employees. The term covers hourly wage rates, 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, and benefits.

Pay differentials are permissible based on seniority, merit, quantity or quality of production, or some factor other than sex. These are known as affirmative defenses. If an employer is sued based on a claim of unequal pay based on sex, the employer has the burden to prove that one of these defenses applies. If an employer corrects sex-based differences in compensation, the lower-paid employees must get an increase; higher-paid employees cannot have their compensation cut.

What Is the Average Pay Difference Between Men and Women? Why Is There a Difference?

According to the Washington Post, the U.S. Census Bureau reports that, on average, for every dollar a man earns, a woman earns 78 cents, a difference of 22 cents per hour. A 2004 study for the Institute for Women’s Policy Research by Stephen J. Rose and Heidi I. Hartmann calculated that across the ages of 26 to 59, considered the prime age range for earning wages, women earn just 38% of what prime age men earned, a difference of 62%.

The wage gap may be affected by the following factors:

• the average woman has less work experience than the average man;
• many of the college majors that lead to the highest-paying jobs are dominated by male students;
• women are more likely to work part-time rather than full-time; and
• women are more likely to leave the workforce to raise children, seek jobs with more flexible hours but lower pay, and choose careers that tend to have lower pay.

Depending on the data you consider, the differences lessen.

• The federal Department of Labor states that for those being paid on an hourly basis, the difference drops to 13 cents per hour.
• The American Association of University Women reported that, after considering a number of factors, including college majors and occupations traditionally filled by one sex or the other, there was a 7% gap one year after college graduation—a gap that grew to 12% after 10 years.
• Data from the federal Bureau of Labor Statistics shows that unmarried women have almost no wage gap, earning 95 cents for every dollar a man makes.
• Female union members are also nearly equal, making nearly 91 cents compared to the dollar earned by male counterparts.
• A survey for the Labor Department by an outside research group during the George W. Bush administration concluded that if men and women with similar characteristics are considered and traditionally female jobs with lower pay, lower hours, or more schedule flexibility are not considered, much of the hourly wage gap decreases to about 5 cents on the dollar.

Possible Long-Term Effects

Based on today’s wage gap (as shown by 2014 U.S. Census Bureau earnings data), women would earn $430,480 less than men during a 40-year career, according to the National Women’s Law Center. For women of color, that number increases dramatically, with the career-earning difference at $1,007,080 for Latinas and $877,480  for African American women.

This wage gap holds true across the country, though the gap can vary widely from state to state. The District of Columbia has the highest long-term difference in wages of men and Hispanic and African American women.

• For women overall, the state with the smallest gap ($248,120) is Florida. The District of Columbia is seventh ($288,560), Maryland is 15^th ($344,160), Virginia is 29^th ($416,760), and the highest gap is in Louisiana ($671,840).
• For Hispanic women, the state with the lowest difference is Vermont ($567,600). Virginia is 41^st ($1,154,560), Maryland is 48^th ($1,473,720), and the District of Columbia has the highest wage gap in the country ($1,781,720).
• African American women fare best in Vermont ($132,000). Maryland is 37^th ($863,960), Virginia is 44^th ($987,040), and the District of Columbia ranks last ($1,595,200).

Summing It Up

It is illegal for an employer to compensate employees based on their gender.

• There must be equal compensation for jobs that are considered substantially equal.
• Whether one position is equal to another is judged on a variety of issues, but not on job title or the qualifications of the person holding the job.
• Compensation includes not only pay rate or salary but also benefits and reimbursement of expenses.
• An employer accused of sex discrimination in compensation could use a number of affirmative defenses but would have the burden of proving them.

If you believe that your compensation is less than others of the opposite sex performing the same or similar work, contact our office so we can discuss your job, the duties of the person with better compensation, the application of the law to your case, and your options to best protect your legal rights and interests.