June 18, 2013

EQUAL PAY ENFORCEMENT: WHAT DO THE LAWS SAY?

Art recently described a pay equity ruling that was declined for review by the Supreme Court. At the heart of the ruling was the difference between pay equity under Title VII versus the Equal Pay Act. We thought a follow up blog on the matter would be useful, and also link the issue to Executive Order 11246 enforcement.

Title VII of the Civil Rights Act (CRA) of 1964, as amended, prohibits discrimination based on race, color, religion, sex, or national origin, which is administered and enforced by the Equal Employment Opportunity Commission (EEOC). Similarly, Executive Order (EO) 11246—which is enforced by the Office of Federal Contract Compliance Programs (OFCCP)—prohibits federal contractors and subcontractors from discriminating in employment decisions (including pay decisions) on the basis of race, color, religion, sex, or national origin, and also requires contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of their employment.

Relatedly, the Equal Pay Act of 1963 (EPA) prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions (29 CFR 206). The EEOC administers and enforces the Equal Pay Act. Contrary to the provisions outlined in Title VII of the Civil Rights Act (1964, 1991), the provisions of the Equal Pay Act do not require anecdotal evidence of discrimination, because intent is not necessary.

In light of the recent OFCCP Directive 307, it is important to note that OFCCP relies on Title VII principles to enforce EO 11246. This includes aligning investigations of pay discrimination with Title VII (not the EPA) principles, in which the agency compares the pay of protected groups covered by the EO. Title VII case law principles for pay enforcement require a higher threshold for identifying pay disparities than the EPA. Title VII principles for pay enforcement include some of the following attributes: ensuring employees are similarly situated when conducting analyses, using anecdotal evidence to prove discrimination, and using statistical methodologies to control for legitimate factors related to compensation.

Importantly, however, the Title VII principle of comparing similarly situated employees from protected groups via similarly situated employee groupings (SSEGs)—which was also required by the now rescinded 2006 Compensation Standards and Voluntary Guidelines—is no longer being used by OFCCP. As mentioned previously, Directive 307 has replaced the SSEG requirement with “pay analysis groupings,” which are undefined (and by default potentially broader) groupings of which the agency now relies during its reviews of contractors’ compensation practices. It will be interesting to see how this issue plays out in audits. Stay tuned.

by David Morgan, M.S., Senior Consultant and Joanna Colosimo, M.A., Senior Consultant, DCI Consulting Group

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INDUSTRY NEWS & LEARNING

DCI Consulting is a risk management human resources consulting firm strategically located in Washington, D.C.

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