The fact that women, and black and Hispanic employees of all genders, continue to be paid less for the same work is gaining increasing national attention and is the focus of a variety of new laws, regulations, and lawsuits.[1]
Evidence of Continuing Pay Disparities
Data from the census show that large racial and gender pay disparities remain in the U.S. workforce. The median hourly wage of white men is $21, compared to $12 (57%) for Hispanic women, $13 (62%) for black women, $14 (67%) for Hispanic men, $15 (71%) for black men, $17 (81%) for white women, and $18 (86%) for Asian women, with only Asian men earning more than white men ($24 or 114%).[2] Thus, there are inequalities both between racial and ethnic groups, and by gender within each ethnic group.[3]
While women, particularly Asian and white women, have made progress in closing the gender gap, there has been no change in the racial pay gap among men.[4] In fact, data show that the racial pay gap between whites and blacks has grown from 18.1% to 26.7% since 1979.[5]
These race and gender wage gaps persist even among those with college degrees. Among those with a college education, Hispanic and black men and Asian and white women earn approximately 80%, and black and Hispanic women earn only about 70%, of the hourly wages of white men.[6]
These results suggest that discrimination is a factor contributing to the race and gender wage gaps. This is illustrated by the fact that differences in education, labor force experience, occupation, industry, and other factors explain only a portion of the gaps. Those explanatory factors also frequently reflect the effects of discrimination.[7]
Although discriminatory pay has been unlawful for decades under federal laws, such as Title VII of the Civil Rights Act of 1966 and the Equal Pay Act, and under state fair employment statutes, the persistence of wage gaps has given rise to new state, local, and federal initiatives.
New State and Local Laws Are Being Passed
One response to continuing pay gaps has been the passage of new state and local fair pay laws. In 2016 California, New York, Maryland, and Massachusetts, along with New York City and Philadelphia, all passed laws requiring equal pay for equal work. Most of these focus on the gender pay gap, but California has also outlawed racial differences in pay. These laws require equal pay for those in similar jobs requiring equal skill, effort and responsibility performed under similar working conditions, unless the employer can prove that the difference in pay is based on a system based on seniority, merit, or that measures quality or quantity of production, or a bona fide factor other than sex.
These laws also generally prohibit employers from imposing restrictions on employees discussing their pay or from retaliating against employees for exercising their rights. Some specifically expand wages to include bonuses, commissions, and other forms of compensation, and prohibit questions about prior salary in the application process and differences in pay based on prior salary alone. These laws also generally allow for enforcement through class actions, enabling employees to act together and recover for all of those denied equal pay.
New EEOC Reports Require Pay Data
A response to the continuing pay gap at the federal level has been a new rule by the Equal Employment Opportunity Commission (EEOC) that, beginning in March 2018, employers must include the number of employees in twelve pay bands, by race and gender, in their annual EEO-1 reports. This will require employers to collect, report, and consider what they pay employees by race and gender. It will also allow the EEOC to analyze employers’ pay practices and take enforcement action where needed. One test of the new Administration’s commitment to equal pay will be whether it interferes with this new rule.
Lawsuits Challenging Gender and Race Pay Gaps
The increased attention to continuing gender and race pay gaps also is reflected in lawsuits challenging discriminatory compensation practices. As employment lawyers, Sanford Heisler Sharp has a history of litigating both class actions and individual cases challenging race discrimination in unequal pay and other employment decisions. And we are in the forefront of current gender discrimination cases and class actions challenging the gender pay gap in pharmaceutical, accounting, public relations, and technology companies, in higher education and, most recently, in major law firms.
These lawsuits often seek to enforce federal and state and local anti-discrimination laws, as well as related laws, such as those providing for family and medical leave. The newly emerging state equal pay acts are adding to the arsenal of these laws, providing additional protections, and making it somewhat easier to succeed in challenges to the pay gaps.
It is important to understand, however, that lawsuits concerning the pay gaps are only the tip of the iceberg. Almost all lawsuits—class actions or otherwise—are filed only after efforts to resolve the underlying complaints have been attempted. Most workplace cases that employees bring to us are resolved privately and confidentially after negotiations.
Hopefully, the increased attention to persistent race and gender pay gaps, and the responses from state legislatures, from the EEOC, and in the courts will help speed the closing of those gaps, resulting in workplaces in which all are paid equally for equal work.
Footnotes
[1] The identification of pay gaps and approaches to removing them was the focus of a recent panel discussion in which I participated, sponsored by the New Jersey State Bar Association’s Labor and Employment Law Section.[2] See Pew.[3]See AAUW, also showing similar ethnic and gender pay gaps for Native Hawaiian and Other Pacific Islanders and American Indian and Alaska Natives.[4] See a href=”http://www.pewresearch.org/fact-tank/2016/07/01/racial-gender-wage-gaps-persist-in-u-s-despite-some-progress/”>Pew.[5] See CNN.[6] See Pew and CNN.[7] See Pew, CNN, AAUW.