Under the Equal Pay Act, an employer may defeat a claim by proving that the wage inequality is based on:
- A merit system
- A seniority system
- A bona fide factor such as education, training, or experience
- A commission or piece work system that measures earnings by production quantity or quality
The employer must show that the above reasons make up the entirety of the reason for the wage inequality and that it is a reasonable consideration. An amendment made in January 2019 means that pay differences must not be justified on the basis of gender, race or ethnicity, or the employee’s prior salary. Compensation decisions may be made on the basis of a current employee’s current salary; however, if that results in differing wages, that decision must be based on the above factors.
How Can An Employer Check If They Are Paying Their Employees In Compliance With The Equal Pay Act?
If an employer wants to be proactive about their Equal Pay Act compliance should evaluate the pay of anyone in substantially similar jobs and ensuring that people of different genders, race, and ethnicity are being paid the same.
How Long Must An Employer Keep Wage and Wage Rate Records?
The Equal Pay Act requires employers to retain records of job classifications, records of wages, wage rates, and other employment terms and conditions for at least three years.