By Schwanda Rountree, Erica Roberts, and Amira Dehmani
In Parts I and II of this series, we discussed the factors that contribute to the wage gap and how the gap developed over time, including intersectional considerations that make the wage gap worse for women of color, older women, LGBTQIA+ individuals, and those with a disability. Today, women are paid 16% less on average than men, and this year, the gap has gotten wider for the first time in over 20 years.
The silver lining is that dedicated advocacy continues to push to eradicate the pay gap through pay transparency laws. Greater pay transparency reduces the pay gap by giving employees the necessary knowledge and bargaining advantage to negotiate for equal pay. One study even concluded that “the strongest evidence on effectiveness in narrowing gender disparities is found for policies that increase transparency.”
There are both state and federal legal developments that are increasing pay transparency and making efforts to lessen the pay gap. Federal and state laws already protect an employee’s ability to discuss pay with their coworkers without repercussions, but new laws and regulations are going into effect that make salary disclosure mandatory and establish protocols for tracking salary data.
State Developments in Equal Pay Protections
California, Colorado, New York, Washington, New Jersey, and several other states require job postings to include explicit salary and benefits information.[1] Some jurisdictions also require that promotional opportunities contain the same information and are made available to existing employees at the same time they are posted externally. Similar legislation has been introduced, but not yet enacted, in Vermont, West Virginia, South Dakota, and other state legislatures; in some states, like Montana and Oregon, efforts to enact pay transparency legislation have failed.
Some of these new laws, like those found in California, Colorado, and Washington, D.C., also prohibit employers from asking about an applicant’s salary history. These provisions in particular aim to break a cycle of chronic unequal pay by increasing transparency and fairness in the hiring and promotions process.
Federal Developments in Equal Pay Protections
The federal government has also made efforts to encourage pay transparency. The Equal Employment Opportunity Commission (EEOC) plans to propose a rule next year to collect pay data from certain employers, including government contractors and private companies. This rule is expected to revive the EEOC’s previous EEO-1 data collection effort known as “Component 2,” which was put into effect during President Obama’s tenure but was challenged and then discontinued under President Trump.[2]
Prior to the program’s discontinuance, the EEOC was able to collect some pay data and identify significant wage gaps. For example, certain private employers in the tech sector in Silicon Valley had extreme pay gaps based on race, sex, and/or ethnicity; one of the employers paid Black male professionals over 50% less than their white male counterparts, and another employer had a similar pay gap for Hispanic female workers relative to white female workers.
The EEOC has emphasized that the lack of transparency “contributes to difficulties identifying cases of pay discrimination, enforcing of antidiscrimination laws, and charting progress toward more equal pay at the societal level.”[3] The commission’s focus is on understanding the history and current state of pay discrimination by analyzing employer data, with the ultimate goal of making greater efforts to narrow and ultimately eliminate the wage gap.
Support from the White House
The Biden-Harris administration has been supportive of these efforts to level the pay playing field. Earlier this year, in honor of the fifteenth anniversary of the Lilly Ledbetter Fair Pay Act and then again on Equal Pay Day, the Biden-Harris administration reaffirmed its commitment to equal pay initiatives.[4]
The executive initiatives in pursuit of advancing pay equity include:
- Issuing a final rule through the Office of Personnel Management that ensured federal agencies will not consider an applicant’s salary history when determining pay.
- Issuing a proposal through the Federal Acquisition Regulatory Council that would prohibit federal contractors from considering an applicant’s salary history in setting pay.
- Issuing guidance through the Department of Labor to clarify existing protections against discrimination in hiring or pay decisions.
- Several initiatives to ensure greater access to jobs for blue-collar federal workers, union workers, women, mothers, and caregivers, in particular.
The Biden-Harris initiatives echo the need for pay transparency as a method of ensuring accountability for pay equity. In attempting to break the unequal pay cycle, these efforts also ensure that an employee’s future pay does not reflect their lack of pay in the past.
Legal Protections for Workers
Workers can rely on discrimination protections that have long been in place to ensure that their rights to equal pay are protected.
Title VII of the Civil Rights Act of 1964 prohibits discrimination in compensation on the basis of race, color, religion, sex, or national origin. The Americans with Disabilities Act (ADA) has the same prohibition for compensation discrimination on the basis of disability, as does the Age Discrimination in Employment Act (ADEA) for workers 40 years old and above. In addition, the Equal Pay Act of 1963 amended the Fair Labor Standards Act and prohibits discrimination in wages based on someone’s sex.
“Compensation” or “wages” under these laws include salary, wages, overtime pay, bonuses, stock options, reimbursements, insurance benefits, and other monetary compensation related to the job.
Are You Being Discriminated Against in Pay? Some Takeaways
A difference in pay by itself is not illegal. There can be many reasons why a person at the same company is paid differently, such as level of experience, credentials, or larger work responsibilities.
However, being paid less because of your sex, gender, race, age, disability, and other protected characteristics is clearly discriminatory. Litigating these claims can involve proving that an employee who is similarly situated but outside of the plaintiff’s protected class is being paid more for performing essentially the same work. A good comparator is someone who performs similar work for the same employer, has similar education, experience, and tenure at the company, yet earns more money.
The transparency laws discussed in this blog may help employees realize that they are being underpaid and give employees bargaining power. If your company posts a position similar to yours with salary information, you should analyze whether you believe you are being underpaid based on the posting. Having open discussions with coworkers may similarly encourage transparency and prevent pay discrimination.
If you believe that you are experiencing pay discrimination because of your gender, race, disability, or another protected class, please feel free to fill out our online intake form to contact an experienced discrimination attorney at our firm today.
[1] https://www.rippling.com/blog/pay-transparency-laws-state-by-state-guide
[2] https://www.eeoc.gov/wysk/what-you-should-know-national-academies-evaluation-compensation-data-collected-through-eeo-1.
[3] Id.
[4] https://www.whitehouse.gov/briefing-room/statements-releases/2024/01/29/fact-sheet-biden-harris-administration-announces-new-actions-to-advance-pay-equity-on-the-15th-anniversary-of-the-lilly-ledbetter-fair-pay-act/; https://www.whitehouse.gov/briefing-room/statements-releases/2024/03/12/fact-sheet-on-equal-pay-day-the-biden-harris-administration-announces-actions-to-continue-advancing-pay-equity-and-womens-economic-security/