U.S. Ninth Circuit Court Of Appeals Notes That The Gender Wage Gap Costs Women Over $840 Billion A Year
The Equal Pay Act of 1963 (EPA), which is part of the Fair Labor Standards Act of 1938, forbids employers from paying an employee at a rate less than that paid to employees of the opposite sex for equal work. As determined by the U.S. Supreme Court in Corning Glass Works v. Brennan, 417 U.S. 188 (1974), Congress enacted the EPA to put an end to the “serious and endemic problem of employment discrimination in private industry” and to implement the principle of equal pay for equal work regardless of sex.
Prior Salary As Justification For Pay Differential
In order to establish an EPA claim, an employee must demonstrate that his or her employer has paid male and female employees different wages for substantially equal work. However, not all pay disparities constitute a violation of the EPA. Rather, the employer can avoid liability under the EPA if it proves that the pay differential is justified by one of four statutory exceptions. Under the four statutory exceptions, an employer is required to prove that the pay disparity is based on: (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production; or (4) any other factor other than sex. In other words, as determined by the Brennan Court, the employer must prove that the pay disparity is not sex-based.
For decades, employers have maintained that they are permitted to consider a job applicant’s prior salary in establishing a starting salary for an employee, and their right to consider an employee’s prior salary is derived from the general “catchall” exception of a “factor other than sex.” As illustrated by the U.S. Ninth Circuit Court of Appeals’ decision in Kouba v. Allstate Insurance Co., 691 F.2d 873 (9th Cir. 1982), where the court ruled that the EPA “does not impose a strict prohibition against the use of prior salary,” numerous courts have permitted employers to justify a pay differential based on an employee’s prior salary under the general “catchall” exception. However, in Rizo v. Yovino, No. 16-15372 (9th Cir. Apr. 9, 2018) (en banc), the Ninth Circuit overruled Kouba and held that an employee’s prior salary does not constitute a “factor other than sex” upon which a wage differential may be based under the general “catchall” exception.
Employer Claims Prior Salary Justifies Gender Wage Gap
In Rizo, Aileen Rizo (Rizo) claimed that her employer, the Fresno County Office of Education (County), paid her less than comparable male employees for the same work in violation of the EPA. Rizo was hired as a math consultant by the County in October 2009. In 2012, Rizo learned that her male co-worker had been subsequently hired as math consultants at higher salaries. The County did not dispute that it paid Rizo less than comparable male employees for the same work. However, the County maintained that the wage differential was lawful under the EPA because it was based on male employees entering the job with higher salary histories. In other words, the County claimed that because the male employees were paid more than Rizo in the past, the County could now pay Rizzo less than the male employees because the male employees’ prior salaries constituted a “factor other than sex.”
Use Of Prior Salary Perpetuates Gender Wage Gap
In rejecting the County’s argument, the Ninth Circuit determined that to allow employers to justify a wage differential between male and female employees by relying on prior salary would “allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum,” which would be “contrary to the text and history of the [EPA], and would vitiate the very purpose for which the [EPA] stands.” In finding that reliance on “past wages simply perpetuates the past pervasive discrimination that the [EPA] seeks to eradicate,” the Ninth Circuit pointed out that although the wage gap between men and women “may have improved” since the passage of the EPA, “the gap persists today” as “women continue to receive lower earnings than men across industries, occupations, and education levels.” In fact, the Ninth Circuit pointed out, “the gender wage gap costs women in the U.S. over $840 billion a year.” “Allowing prior salary to justify a wage differential perpetuates this message,” the Ninth Circuit concluded, “entrenching in salary systems an obvious means of discrimination—the very discrimination that the [EPA] was designed to prohibit and rectify.”
Free Consultation With Ocala Sex Discrimination Attorneys
Based in Ocala, Florida and representing employees throughout Central Florida, we have been litigating sex discrimination cases for almost twenty years. If you have questions about the Equal Pay Act or about pay disparities between male and female employees, please contact our office for a free consultation with our Marion County, Florida sex discrimination lawyers. Our employee rights law firm takes sex discrimination and equal pay cases on a contingency fee basis. This means that there are no attorney’s fees incurred unless there is a recovery and our attorney’s fees come solely from the monetary award that you recover.