Minding the Pay Gap:
What Employers Need to Know as
Pay Equity Protections Widen
Authors
Trish Martin
Breanne Martell
Denise Visconti
Corinn Jackson
Thelma Akpan
Jenny Orr
Littler Mendelson, P.C.
Contents
I. Introduction .......................................................................................................................................... 2
II. The Nuts and Bolts of Pay Equity .......................................................................................................... 3
A. Federal Law ....................................................................................................................................... 3
1. The Federal Equal Pay Act ............................................................................................................. 3
2. Title VII of the Civil Rights Act of 1964. ....................................................................................... 10
B. State Equal Pay Laws ................................................................................................................... 13
Protected Classes of Employees ......................................................................................................... 13
The Functional Scope of Positions that Can Be Compared ................................................................. 14
Geographic Limitations on Comparators ............................................................................................ 15
What Is Included in Compensation? ................................................................................................... 15
Permitted Bases for Wage Differentials ............................................................................................. 16
Burden of Proof ................................................................................................................................... 19
Prohibition Against Using Prior Salaries or Salary History to Justify Pay Differentials ....................... 19
Prohibition Against Reducing the Wages of Other Employees to C omply ......................................... 21
Self-Audits as a Defense ...................................................................................................................... 22
Wage Secrecy Prohibitions ................................................................................................................. 22
Anti-Retaliation Provisions .................................................................................................................. 23
Prohibitions on Providing Less Favorable Opportunities .................................................................... 23
No Exhaustion of Administrative Remedies ....................................................................................... 24
Statute of Limitations .......................................................................................................................... 24
Remedies ............................................................................................................................................. 25
C. Procedural Distinctions Between Representative Actions Brought Under Different
Pay Equity Laws ................................................................................................................................... 26
Efforts Around the United States and Globally for Increased P ay Transparency ............................... 28
III. Practical Recommendations for Employers to Help Avoid Pay Equity Issues ................................. 29
IV. Practical Recommendations to Employers to Remediate Pay Equity Issues .................................. 31
2
Minding the Pay Gap:
What Employers Need to Know as Pay Equity Protections Widen
I. Introduction
The pay gap – or paying women and other historically marginalized groups less for the same or
substantially similar work – has long been in the media spotlight. But as employees, boards, consumers,
and the public are increasingly expecting more from organizations surrounding diversity, equity, and
inclusion, the stakes for employers regarding pay equity continue to rise. Politicians have also taken note.
While there have been pay discrimination laws on the books at the federal level and in most states for
decades, over the past several years, state and local governments and Puerto Rico have passed numerous
new laws all aimed at closing the pay gap. Since 2020, mo re than 200 bills addressing pay equity were
introduced in nearly every state. At the time of publication, 21 states have enacted “second wave” pay
equity laws; 29 states and municipalities have enacted salary history inquiry bans; and 21 states have
enacted wage transparency provisions.
While the federal Equal Pay Act prohibits employers f rom paying employees less for equal work because
of gender, these second wave pay equity laws revise this standard – prohibiting unequal pay for
“comparable” work as opposed to “equal” work. The newly enacted salary history inquiry bans restrict
employers’ ability to inquire into the salary history of applicants. Wage transp arency measures prohibit
employers from banning pay disclosure in the workplace or from retaliating against employees who
discuss their wages. Finally, several states have recently enacted legislation that requires employers to
publicly report employee compensation data to the state. Employers must comply with federal law and
this growing patchwork of state and local laws.
The plaintiffs’ bar also has gotten in on the action. Since 2016, over 600 pay equity cases have been filed
in the United States. High-profile pay equity cases are in the news frequently – the class and collective
action filed in California federal court by all 28 members of the U.S. Women’s soccer team – which recently
settled for $24 million – is just one example. Law firms and technology companies also have been targets.
Indeed, to a large extent, the cases target professional services organizations and professional positions:
lawyers, engineers, professors, scientists, managers and doctors. In addition to an equal pay claim, these
lawsuits frequently include claims of discrimination, sexual hara ssment or wrongful termination. These
lawsuits have been filed in state and federal courts across the nation as both single plaintiff cases and
class or collective actions.
The EEOC has focused on pay equity in the last several years, and stated that pay equity claims were one
its six major priorities in 2021.1 Indeed, the number of charges filed relating to Equal Pay Act claims has
remained high in recent years, with 1,117 charges filed in 2019, 980 in 2020 and 885 in 2021, resulting in
$45.4 million dollars in settlements.2, 3 Further, since 2015, the EEOC has filed approximately 40 lawsuits
involving Equal Pay Act claims. The EEOC has extensive authority to investigate whether an employer
1 EEOC Strategic Enforcement Plan (SEP), 2017-2021 at 8, available at https://www.eeoc.gov/eeoc/plan/sep-
2017.cfm.
2 See EEOC, Enforcement and Litigation Statistics, available at
https://www.eeoc.gov/eeoc/statistics/enforcement/index.cfm.
3 While there has been a decline in the amount of EPA lawsuits brought by the EEOC over the last several years,
there has been a decline of EEOC lawsuits in general. Many attribute this decline due to changes in EEOC leadership
under the Trump administration, and the amount of EEOC lawsuits under the Biden administration is expected to
again increase.
