Copyright

Equal Pay Act: Definition and Effects

Equal Pay Act: Definition and Effects
Coming up next: ERISA Law: Explanation & Importance

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:05 Equal Pay Act Defined
  • 1:06 General Rule and Factors
  • 3:25 Equal Pay - Still a Gap
  • 4:16 Enforcement
  • 4:56 Lesson Summary
Add to Add to Add to

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Timeline
Autoplay
Autoplay
Speed
Lesson Transcript
Instructor: Shawn Grimsley
Women have made huge strides in the working world in recent decades. However, there is still a problem of unequal pay. In this lesson, you'll learn about the Equal Pay Act and its key provisions. A short quiz follows the lesson.

Equal Pay Act Defined

Tiffany just got a promotion landing her in the executive suite. She's proud that she's busted through the glass ceiling but has been pulled aside by one of her fellow female executives who tells her to carefully review her compensation package. Tiffany asks why and is told that the company has a history of not paying women as much as men who hold the same position. Her new friend, Alice, invites her to lunch to discuss.

After placing their orders, Alice tells Tiffany that it's actually against the law for most businesses to pay women less for the same work. The Equal Pay Act of 1963 (EPA) requires that an employer pay male and female employees equal pay for equal work. Employers cannot engage in pay discrimination based on gender. Pay includes not only salary, wages and overtime, but also bonuses, stock options, profit sharing, vacation and holiday pay, reimbursement for travel, life insurance and other benefits.

General Rule and Factors

According to the Equal Employment Opportunity Commission, '...the EPA provides that employers may not pay unequal wages to men and women who perform jobs that require substantially equal skill, effort and responsibility, and that are performed under similar working conditions within the same establishment.' Tiffany asks for more details, and Alice explains that you can break the rule down into several factors.

1. Do the jobs require the same level of skills?

It's the skills related to the job that count, not the skills of each respective employee. An assistant store manager at a fast food restaurant with a PhD in quantum physics may be more skilled because of his or her education, but the PhD is not relevant to managing a burger joint.

2. Do the jobs require the same level of physical or mental effort?

Basically, are they doing the same work to the same extent? If one person's job requires an additional task or a more physically or mentally difficult task, an increase in pay may be justified.

3. Do the jobs require the same general level of responsibility?

Minor differences are irrelevant and can't be used as a pretext to discriminate in pay. For example, an employee who has to turn off the coffee pot at the end of the day doesn't have any more real responsibility than anyone else.

4. Do the jobs have the same basic type of working conditions?

You can break working conditions down to physical surroundings and hazards.

5. The prohibition against pay discrimination generally only applies to people in the same establishment.

An establishment is a distinct physical place of business. For example, people employed by the business in its New York office may be paid more than people employed in its Denver office.

Keep in mind that not all pay discrimination is illegal. According to the EEOC, there can be pay differentials between male and female employees if it is based on some legitimate factor, such as 'seniority, merit, quantity or quality of production or a factor other than sex.'

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support