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, more 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 from 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 transparency 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 harassment 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. 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. 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 may be violating the Equal Pay Act, even where no charge of discrimination has been filed. During these investigations, the EEOC has broad authority to make far-reaching requests for information.

This white paper provides a discussion of the nuts and bolts of the various existing pay equity laws, including:

• the elements a plaintiff must establish to prove a claim;
• the defenses available to employers;
• the damages available; and
• the procedural mechanisms that allow for these cases to be brought as class or collective actions – increasing the exposure for employers.

We also provide practical recommendations to help employers avoid pay inequities. Finally, we provide tips on how employers can seek to remediate pay inequities identified through a self-audit or otherwise.

Click here to read the full report.