New requirements and prohibitions on compensation practices around the country are making pay equity a hot topic. These obligations seek to address the “gender pay gap,” which the latest reports estimate is at a little over 20 percent, with women across all occupations having median earnings around 78 percent of the median earnings of men across all occupations. Although some dispute whether there is in fact a gender pay gap, its existence is so widely accepted that many jurisdictions are taking steps to promote pay equity.

This article gives an overview of trends in pay equity litigation.

Background

In 2016 alone, states, including California, Maryland, Massachusetts, and New York, implemented new pay equity legislation that impose stricter standards on employers. These come with severe consequences for noncompliance. For example, the New York legislature amended the state Labor Law, effective 2016, to bar employers from prohibiting employees from discussing, disclosing, or asking about their compensation. This pay transparency provision (designed to facilitate employees' sharing of pay data and to enhance the likelihood pay disparities are discovered in the regular course of employee interactions and cannot be kept hidden by the employer) is comparable to newly added features of the fair pay laws in many other states. The New York Labor Law amendments also significantly increase available liquidated damages, to three times the amount of wages due.

A significant feature of the much of the new pay equity legislation is the creation of broader comparisons among employees. For example, under the federal Equal Pay Act, an employee pursuing a claim of gender-based unequal pay must demonstrate she performs work that is equal in skill, responsibility, and effort to the work performed under similar working conditions by one or more male comparators. Under the newly enacted California and Massachusetts laws, however, the employee must show only that her job duties are “substantially similar” to those of a male comparator. The recently enacted Oregon Equal Pay Act of 2017 likewise requires the employee to show her job duties are “substantially similar” to those of a male comparator. Although the New York Labor Law was amended, effective in 2016, to create stricter pay equity requirements, its terms continue to use the “equal work” language used in the federal Equal Pay Act, not adopting the new, broader standards of the California and Massachusetts equal pay laws.