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Pay Equity Matters: Mind the Gap

Posts tagged Pay Equity.

Tinseltown stars have always had a special place in our hearts. Their portrayals of characters brought to life from our favorite books or screenplays so often teach us lessons about ourselves, life, and those around us. What we hadn’t bargained for, however, is how much they seem to be showing us about employment law lately. The newest lesson—pay equity. 

Call it ironic, but even providers of legal services are targets for pay equity litigation. Case in point: a $300 million dollar class action lawsuit filed against a labor and employment law firm in the U.S. District Court for the Northern District of California.

Hours after being sworn in as New Jersey’s 56th governor yesterday, Governor Phil Murphy signed an executive order prohibiting public employers from inquiring about a job applicant’s current or prior salary. In doing so, New Jersey follows in the footsteps of other states, cities, and counties (including Albany County, New York, California, Delaware, Massachusetts, New York City, San Francisco, and Oregon) that have enacted similar laws applying to both public and private employers.

The first day of the legislative session in Florida saw the introduction of two pay equity bills referred to as the “Senator Helen Gordon Davis Fair Pay Protection Act.” The bills, SB 594 and HB 393, would create additional causes of action arising out of unequal pay or unequal opportunities in employment based upon gender. Additionally, the bills propose new protections for discussing employee wages in the workplace, and would bar employers from inquiring about past wage and salary histories of applicants and employees.

A group of former Google employees just filed an amended complaint in California federal court in an attempt to breathe new life into their equal pay class action lawsuit, which had been dismissed in December for failing to sufficiently allege facts demonstrating an ascertainable class. The pay equity world will now have its collective eyes on Google to see how the company responds, and to follow the latest chapter in one of the most high-profile pay equity claims ever filed. 

It is no secret that pay inequity has plagued the United States and abroad for as long as women have been in the workforce. Although the U.S. and other countries have had laws on the books, in many cases for decades, prohibiting discrimination against women with respect to pay, the issue remains. On average, women still make 20 percent less than men performing the same work. Pay inequity has resulted in a growing number of lawsuits against employers on a worldwide basis, often leading to sky-high defense costs, and hefty damage awards.

No one denies the pay gap between men and women exists. However, there is much debate as to how best to close that gap. In the United Kingdom (UK), legislators are employing a “naming and shaming” strategy to try to use to use the power of public accountability to push employers toward greater pay equity.

Employers got a good reminder this week in a case decided by an Illinois federal court about how easily complaints of unequal pay by a single employee can spiral into a conditional class action, upping the stakes and increasing the costs of litigation.

In an amount sure to catch the attention of corporate general counsel – as well as raise their blood pressure – a class of sales representatives for an international pharmaceutical company recently settled their Equal Pay Act (EPA) and Title VII gender pay discrimination collective and class claims for four million dollars (Barrett v. Forest Laboratories, Inc., 12-cv-05224 (S.D.N.Y.)) Despite the multi-million-dollar settlement amount announced on October 6, 2017, the employer still avoided substantial risk, as the total potential recovery was estimated at over 10 million dollars.   

New York City employers will soon be prohibited from asking job applicants about their salary history. As a measure to address gender-based wage gaps, the New York City Council passed legislation earlier this year which prohibits employers from making inquiries about the salary history of a job applicant or relying on the salary history of an applicant in determining compensation. The law takes effect October 31, 2017.  Details of the law are available here.

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