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Another Step Toward Equal Pay
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\nOn April 9, 2018, in\xa0Rizo v. Yovino,\xa0the Ninth Circuit Court of Appeals held\xa0that under the federal\xa0Equal Pay Act\xa0an employer cannot justify a wage differential between male and female employees by relying on prior salary. The 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.
\nAccording to the court\u2019s opinion, \u201c[w]e now hold that prior salary alone or in combination with other factors cannot justify a wage differential. To hold otherwise \u2013 to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap [endlessly] \u2013 would be contrary to the text and history of the EPA and would vitiate the very purpose for which the act stands.\u201d
\nIn plain language,\xa0An employee\u2019s prior salary does not constitute a \u201cfactor other than sex\u201d upon which a wage differential may be based under the \u201ccatchall\u201d exception of the\xa0Equal Pay Act\xa0(EPA).\xa0\xa0\xa0This is true regardless of whether past salary was considered alone or in conjunction with other factors. Based on the history and statutory text, \u201cany other factor other than sex\u201d is limited to legitimate, job-related factors such as a prospective employee\u2019s experience, education, or ability. Consequently, a county employer that relied on prior salary to set a female employee\u2019s starting salary failed to set forth an affirmative defense, and the denial of its motion for summary judgment against the employee\u2019s EPA claim was affirmed.
\nWhat Happened in\xa0Rizo
\nIn this case, after Rizo was hired she learned that male colleagues in the same job were being hired at a higher salary than her. However, the only rationale the employer offered for this wage disparity was that Rizo\u2019s salary was lower at a prior job. The court held, \u201c[that] this scenario provides a textbook violation of the \u201cequal pay for equal work\u201d mantra of the EPA . . . because [p]rior salary level created the\xa0only\xa0differential between Rizo and her male colleagues. Thus, requiring that the \u201cany-other-factor-other-than-sex\u201d defense must be limited to legitimate, job-related factors.\u201d
\nThrough this decision, the Ninth Circuit (covering employers in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) joins the Second, Sixth, Tenth, and Eleventh Circuits that have likewise interpreted the \u201cany-factor-other-than-sex\u201d defense is limited in its application.
\nWhat Now?
\nThe impact of the\xa0Rizo\xa0decision reinforces federal and state equal pay rights and highlights\xa0National Equal Pay\xa0Day\xa0because the decision was filed April 9, 2018, the day before 2018\u2019s Equal Pay Day. Equal Pay Day was originated by the National Committee on Pay Equity (NCPE) as a public awareness event illustrating the gap between men\u2019s and women\u2019s wages and is commemorated around the nation and the world. When created, the NCPE decided to select a Tuesday in April as Equal Pay Day. A Tuesday was selected to represent how far into the next work week women must work to earn what men earned the previous week.
\nAs the fight for equal pay continues,\xa0Rizo\xa0may be reviewed by the Supreme Court, although there are no current indications the employer is pursuing review. So, what now? Employers should take steps to review their policies and eliminate any hiring policy that relies on a job applicant\u2019s prior salary in determining their starting pay. Additionally, employers should review applicable state laws related to hiring practices and prior salaries to ensure compliance and avoid liability.
\nHowever,