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Sex Discrimination in Raises and Compensation Policies in 2023: What’s New in the Law?

Sex Discrimination in Raises and Compensation Policies in 2023: What’s New in the Law?

We’ve known for years that unequal pay is holding women back.

A Biden administration report in 2023 estimated that women employed full-time are receiving 15% less pay than men, which means women are earning about $10,000 less per year. The deficit can be even worse for Black and Hispanic women, Native American women, and women with disabilities.

On top of all this, women who decide to have children see their earning power fall. Hispanic moms earn about 47 cents compared to each dollar paid to white fathers, while Native American moms earn 49 cents and Black moms 52 cents, according to the National Women’s Law Center.

Sex discrimination at work can take many forms, all of which tend to impact women’s pay. Women may be pigeonholed into certain lower-paying, non-leadership jobs. At the highest levels of company leadership, executives tend to be 75% men and only one in four women, while less than one in 25 of high-level executives is a Black, Hispanic, or Native American woman.

Promotions and raises may be more difficult to achieve for women in the workplace. Discrimination on the basis of family status, past or future pregnancy or childbirth, and other factors linked to being a woman remains distressingly common.

Using pay levels from past jobs to set pay going forward can be part of the problem. Women are emerging from decades of discriminatory treatment, and do not enter the comparison game on an equal footing. The Biden administration is looking into ways that salary history drives unequal pay.

Women can be laid off or have their hours cut at higher rates. During the pandemic, they were disproportionately fired or furloughed, reversing years of progress towards more equal treatment. In the layoffs of 2022 and 2023, tech companies targeted women for an outsized number of layoffs, despite promises to change the “bro” culture of hiring and promotion in the industry.

Sex and going through childbirth can also be related to disability discrimination. Women are more likely to suffer a disability that affects work and other life activities. A failure to accommodate disabilities with altered schedules, assistive technology, or other reasonable steps can result in reduced pay and benefits, lost retirement contributions, and emotional distress.

Equal pay violations can be difficult to detect. Congress recognized this problem and passed the Lilly Ledbetter Equal Pay Act, which says that every paycheck that reflects discriminatory pay on grounds of sex gives rise to a lawsuit, not just the first paycheck.

Courts can be flexible in hearing Equal Pay Act claims, because they know that employers hold a lot of the records and are likely to deny any illegal conduct. They permit an employee to satisfy her initial burden of proof by showing that employees of the opposite sex were paid differently for performing similar work, in terms of the required skill, effort and responsibility, and the prevailing working conditions such as time and location. The employer then has an opportunity to show that differences are based on a true seniority system, a merit system, a production quantity or quality measure, or some other non-sex-based factor. If a rational jury could disbelieve the employer’s account of pay differences, due to inconsistencies in its approach or some other reason, a jury trial may be required.

If you have reason to suspect that a co-worker of a different sex than you is receiving more pay for equal work, you may benefit from a free consultation on the topic of equal pay for equal work.

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