The Equal Pay Act of 1963 is a federal law that bans employers from paying men and women two different wages for doing the same job. Signed into law by John F. Kennedy as an amendment to the Fair Labor Standards Act, the law was primarily intended to help women who experience wage discrimination. However, it does protect men and women equally. The act regulates both government employers and private employers.
The Definition of Equal Work
Equal work is not based on a job title or description. Instead, it’s defined as two jobs that are either identical or very similar. If you hire employees to work for your business, you must pay them the same rate. Two positions are considered the same when they require the same level of skill, education, training, effort and responsibility and when they are performed in the same work conditions. It is okay to pay one gender more than the other in some situations, such as if one position has a few extra duties. However, a court will still take issue if you appear to be assigning the jobs with more duties to one gender.
The Definition of Equal Pay
Equal pay is defined based on rates and fringe benefits, not total pay. Imagine that you run a small diner and decide to employ one waiter and one waitress. If the waiter is more efficient and receives more tips, he will probably have a larger income each week. This is acceptable as long as you are paying both employees the minimum tipped wage required by the law governing your locale. You must also provide the same benefits packages. Benefits include health and life insurance, retirement and other pension plans, paid vacation and sick time, profit sharing, bonuses and so on.
The Process of Filing a Claim
If one of your employees decides to file a claim based on the belief that he or she is being paid less than someone of the opposite gender who is performing the same duties, that person has the burden of proof. This means that your employee must prove that he or she is performing the same duties as someone else, and that there is a disparity between either the pay rate or benefits. The amount of time your employee has to file his or her claim will vary based on the situation. Although claims filed because of the Equal Pay Act are not required to go through the Equal Employment Opportunity Commission (EEOC) the way Title VII claims are, most experts still recommend doing so for a provisional claim. No matter how your employee files, you will have a chance to dispute the claim if you believe the disparity between wages is legitimate. The burden of proof will fall on you to show that the discrepancy is based on one employee having seniority, having more experience or having higher productivity rates.
How You Can Avoid Problems
As a business owner, you can take some steps to avoid having to deal with an Equal Pay Act claim. Most importantly, you and anyone you employ who is responsible for hiring others or creating payroll should evaluate your company’s compensation practices each year. In addition to a full evaluation, you should conduct “spot checks” throughout the year. Always be transparent with your employees when it comes to your compensation practices and make it clear that you reward top performers. Finally, never make assumptions about a person’s abilities based on his or her gender, and immediately fix any problems you find.
Once you understand how the Equal Pay Act applies to your business, it will be easier for you to ensure you are following best practices when it comes to employee compensation. You will also know how to protect yourself should a claim be filed anyway.
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