It can be a costly proposition if you’re accused of paying one group of employees more or less than others. Most of these cases concern female employees allegedly being paid less than men. Still, they can involve any consistent group of people, whether they’re divided by color, race, national origin, disability, or another protected basis as a breach of contract lawyer can share.
State And Federal Laws Set The Playing Field
Under federal and state anti-discrimination laws, paying one group of people unequally while benefitting another is illegal. The Equal Pay Act, for example, covers unequal payment issues between men and women, according to the federal agency enforcing it, the Equal Employment Opportunity Commission (EEOC).
The law requires that employees earn equal pay for equal work. The jobs need not be identical but must be substantially equal. Job content, not titles, decides if work is substantially equal. As our friends at Focus Law LA can explain, all pay forms are covered by the law, including the following:
- Salary
- Overtime pay
- Bonuses
- Stock options
- Bonuses
- Profit sharing
- Life insurance
- Vacation and holiday pay
- Gasoline allowances
- Hotel accommodations
- Expense reimbursement
- Benefits
If there’s an inequality, an employer can’t cut one group’s compensation to equalize the situation.
Disney Settles Unequal Pay Lawsuit
Disney reached a $43 million lawsuit settlement in November over claims female employees were paid less than their male coworkers in similar roles for almost a decade, according to CNN. The original legal matter was filed in 2019 by LaRonda Rasmussen.
She alleged six men with the same job title made far more than her, including one with several years less experience but who earned about $20,000 more annually than she did. About 9,000 past and current female employees joined the case.
The pay inequity started when female employees joined Disney from working elsewhere. Though they were paid more than prior employers, plaintiffs claim they weren’t making equal pay at Disney. The company denied the allegations and didn’t admit fault, which is customary in large lawsuits involving potential wrongdoing.
The settlement includes Disney hiring a labor economist to review the pay equity of full-time, non-union California employees below the vice president level for three years and make corrections. The judge assigned the case must approve the settlement.
Past Discrimination Isn’t An Excuse To Continue It
Illegal employment discrimination shows itself in many ways, including unequal pay. It could be denying someone time off they earned because of their national origin, not allowing someone to take a religious holiday off, or sexually harassing a female employee.
Continuing those illegal practices can’t be justified if that person leaves that employee. Unlawful discrimination isn’t “grandfather in” and permitted with a new employer because it happened in the past.
It’s the same with unequal pay. Although it’s customary to attract a new employee with a higher income than what they earned before, that may not be enough if your workforce’s pay reflects prior discriminatory payment practices by your employer or others. To comply with the law, your new employee, among others, may need a raise.
If you have any questions about unequal pay issues or you’ve been accused of paying workers unequally, discuss the matter with your attorney.