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Jun 02, 2017

Layoffs, job restructuring, and wage freezes no excuse for unequal pay

Harassment & DiscriminationWage and Hour 

A furniture manufacturing company blamed tough economic conditions as the reason for paying three female managers less than their male counterparts, but a federal appeals court didn’t buy it.

Female Managers Sued Their Employer Under the Equal Pay Act

The female managers sued under the federal Equal Pay Act (EPA), which generally requires women and men to be paid the same if they perform work of equal skill, effort, and responsibility, under similar working conditions. The only exceptions are if the difference in pay is based on a seniority system, a merit system, a system that measures quantity or quality of production, or any other factor other than sex.

A Factor Other Than Sex?

The company claimed that the recession that began in late 2008 was a “factor other than sex.” The company laid employees off and restructured jobs, but the court said those actions didn’t appear to affect the women’s pay. In addition, the company’s decision to freeze merit-pay increases during the recession simply continued pre-existing wage differences; it didn’t cause them. The women were awarded a total of $204,000 in back pay and other damages, plus $269,877.67 to pay their attorneys, and an additional amount (yet to be calculated) to cover their court costs (Dindinger v. Allsteel, Inc., 8th Cir, April 2017).

 

Tips for Employers:
Continual Efforts to Eliminate the Wage Gap

Pay equity continues to be a hot topic. State legislatures are looking for ways to expand equal pay laws, while enforcement agencies such as the Equal Employment Opportunity Commission (EEOC) and Office of Federal Contract Compliance Programs (OFCCP) pursue initiatives to seek out and eliminate pay disparities. April 4, 2017, was trumpeted in the news and on social media as “Equal Pay Day,” the symbolic day that women’s earnings caught up to men’s earnings for their work in 2016 (i.e., women had to work approximately 15 months to earn what men earned in 12 months).

Audit Your Pay Practices

If you decide to conduct a pay equity review, do so under the direction of an attorney in order to preserve confidentiality to the extent possible. Your Vigilant employment attorney can help you explore options, which may include using an outside consultant with statistical expertise.  

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