Equal Pay Act

What the Equal Pay Act requires

The Equal Pay Act (EPA) amended the Fair Labor Standards Act, which is why it reaches almost every employer covered by the FLSA, with no 15-employee minimum. It prohibits paying employees of one sex less than employees of the other sex for equal work in the same establishment. It protects both men and women, and it covers exempt and non-exempt employees, including executives and professionals.

Pay means all compensation, not just base salary or hourly rate. Overtime, bonuses, stock options, profit sharing, life insurance, vacation and holiday pay, expense accounts and benefits all count. A company that pays equal base rates but gives men larger sign-on bonuses or a better car allowance has an EPA problem.

The remedy can only go one way. An employer that finds an unlawful gap cannot cut the higher-paid person's pay to close it. It has to raise the lower-paid person.

What counts as equal work

The jobs do not have to be identical, only substantially equal. Job titles and job descriptions do not decide the question; actual job content does. The EEOC and courts look at four elements:

• Skill: experience, training, education and ability needed to do the job. Skills the job does not use do not count, so a degree that one employee holds but never uses does not justify higher pay.
• Effort: physical or mental exertion. A small amount of extra lifting done rarely does not make two jobs unequal.
• Responsibility: accountability and authority. Supervising others or handling cash reconciliation every shift can make a difference; occasionally filling in for the manager usually does not.
• Working conditions: physical surroundings and hazards. Shift differences (day vs night) are not treated as different working conditions under the EPA, though a separate shift differential can be paid if it applies to everyone on that shift.

The comparison is limited to the same establishment, which usually means a single physical location, although centrally administered pay across sites can widen it.

A practical example: two customer support team leads at the same site each supervise 14 agents, run the same daily huddles and own the same quality scores. One is a man paid $62,000, one is a woman paid $55,500. Different titles in the HRIS (Team Lead II vs Team Supervisor) will not save the employer if the work is substantially equal.

The four affirmative defenses

Once an employee shows unequal pay for equal work, the burden shifts to the employer to prove the difference is based on one of four things:

1. A seniority system.
2. A merit system.
3. A system that measures earnings by quantity or quality of production, such as piece rates or commission.
4. A factor other than sex.

The systems in the first three need to be real: written down, communicated and applied consistently. A merit system that exists only in the head of a regional manager does not qualify.

The fourth defense is where most fights happen. Education, relevant experience, a different shift, a market premium for a hard-to-fill skill and a red-circled rate after a demotion can all work if they are applied the same way to everyone. Prior salary is the contested one. Courts disagree on whether prior pay alone can be a factor other than sex; the Ninth Circuit held in Rizo v. Yovino (2020) that it cannot. Many states and cities also ban asking about it, which is why a salary history ban changes how recruiters run offer conversations.

Equal Pay Act vs Title VII

Pay discrimination based on sex can be challenged under both laws, and plaintiffs often file under both. They differ in ways that matter.

• Intent. The EPA does not require proof of intent. Title VII disparate treatment claims do.
• Equal work. The EPA requires a comparator doing substantially equal work. Title VII does not, so a woman can challenge pay even if no man does the same job.
• Protected traits. The EPA covers sex only. Title VII also covers race, color, religion and national origin.
• Filing. EPA claims can go straight to court with no EEOC charge, within two years of the violation or three if it was willful. Title VII requires a charge within 180 or 300 days.
• Damages. The EPA gives back pay plus an equal amount as liquidated damages. Title VII allows compensatory and punitive damages, subject to caps.

Under the Lilly Ledbetter Fair Pay Act of 2009, each discriminatory paycheck restarts the Title VII filing clock, so an old pay decision can still be challenged years later.

Why recruiters and comp teams should care

Most pay gaps are created at the offer stage. A recruiter negotiates harder with one candidate, a hiring manager approves a bump for someone who pushed back, or a starting rate is pegged to whatever the candidate earned before. Each choice looks small. Over a year of volume hiring they add up to patterns.

A few habits that prevent this:

• Publish a pay range for each role and level and require written justification for offers above the midpoint.
• Define starting-rate rules for hourly roles (base rate plus documented premiums for specific experience or certifications) and stick to them.
• Review offers by job and site each quarter for gaps by sex that have no documented factor.
• Pair this with pay transparency obligations, which in many states already require ranges in postings.

A regular pay equity audit, run with counsel so the findings can be privileged, is the most reliable way to find and fix gaps before an employee does.

State equal pay laws

Many states go well beyond the federal EPA. California, New York, Massachusetts, Washington, Oregon, Colorado, Maryland and New Jersey, among others, use a broader substantially similar work standard, cover more traits than sex, compare across locations or limit which factors can justify a gap. Colorado's Equal Pay for Equal Work Act and California's Fair Pay Act are the usual reference points. Multi-state employers usually set policy to the strictest state they operate in. This page covers the federal rule; check state law before relying on any defense.