US forbids using salary history to pay female staff less than men US forbids using salary history to pay female staff less than men

US forbids using salary history to pay female staff less than men
18 Apr 2018

A US federal court has ruled that employers cannot use salary history to justify paying women less than men for the same work.

The case centred on Aileen Rizo, a maths consultant employed by the Fresno County Office of Education. She said she learned in 2012 that her male counterparts earned significantly more than her, despite her greater experience and seniority.

According to CNN, the Ninth Circuit Court of Appeals has now decided in her favour, ruling that wage disparities based on “prior salary alone or in combination with other factors” violated the Equal Pay Act. The case was heard by an 11-judge panel, including the late Judge Stephen Reinhardt, who penned the majority opinion prior to his death last month.

"The Equal Pay Act stands for a principle as simple as it is just: men and women should receive equal pay for equal work regardless of sex," Reinhardt wrote. "The question before us is also simple: can an employer justify a wage differential between male and female employees by relying on prior salary? Based on the text, history and purpose of the Equal Pay Act, the answer is clear: No."

Rizo filed a lawsuit against county superintendent Jim Yovino in 2012. Five years later, a three-judge panel from the Ninth Circuit ruled against her, holding with the Ninth Circuit's 1982 decision that using prior wages to determine current salary was permissible under the Equal Pay Act as “a factor other than sex”. The latest decision has overturned this ruling.

Stephanie Bornstein, an associate professor of law at the University of Florida Levin College of Law, said: "Many employers use prior salary alone or as one factor in setting pay. Because a woman's pay may be unfairly low to begin with, it perpetuates pay discrimination into the future, from her first job throughout her entire career."

Therefore, the new ruling means that, “even if an employer does not intend to discriminate, it cannot consider prior salary when setting an employee's pay - it must focus only on job-related factors", she added.

In 2017, women in the US earned an average of 82% of a man’s salary, according to Pew Research. This means it would take an extra 47 days of work for a female to achieve wage parity with men. The gender pay gap is even wider among African-American and Hispanic female workers.

In the years following Rizo's initial suit, California, Massachusetts and Oregon have all passed laws prohibiting employers from asking applicants for their salary histories. New York governor Andrew Cuomo is also proposing similar legislation. He signed an executive order last year barring the state from undertaking such requests.

Emma

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

 

A US federal court has ruled that employers cannot use salary history to justify paying women less than men for the same work.

The case centred on Aileen Rizo, a maths consultant employed by the Fresno County Office of Education. She said she learned in 2012 that her male counterparts earned significantly more than her, despite her greater experience and seniority.

According to CNN, the Ninth Circuit Court of Appeals has now decided in her favour, ruling that wage disparities based on “prior salary alone or in combination with other factors” violated the Equal Pay Act. The case was heard by an 11-judge panel, including the late Judge Stephen Reinhardt, who penned the majority opinion prior to his death last month.

"The Equal Pay Act stands for a principle as simple as it is just: men and women should receive equal pay for equal work regardless of sex," Reinhardt wrote. "The question before us is also simple: can an employer justify a wage differential between male and female employees by relying on prior salary? Based on the text, history and purpose of the Equal Pay Act, the answer is clear: No."

Rizo filed a lawsuit against county superintendent Jim Yovino in 2012. Five years later, a three-judge panel from the Ninth Circuit ruled against her, holding with the Ninth Circuit's 1982 decision that using prior wages to determine current salary was permissible under the Equal Pay Act as “a factor other than sex”. The latest decision has overturned this ruling.

Stephanie Bornstein, an associate professor of law at the University of Florida Levin College of Law, said: "Many employers use prior salary alone or as one factor in setting pay. Because a woman's pay may be unfairly low to begin with, it perpetuates pay discrimination into the future, from her first job throughout her entire career."

Therefore, the new ruling means that, “even if an employer does not intend to discriminate, it cannot consider prior salary when setting an employee's pay - it must focus only on job-related factors", she added.

In 2017, women in the US earned an average of 82% of a man’s salary, according to Pew Research. This means it would take an extra 47 days of work for a female to achieve wage parity with men. The gender pay gap is even wider among African-American and Hispanic female workers.

In the years following Rizo's initial suit, California, Massachusetts and Oregon have all passed laws prohibiting employers from asking applicants for their salary histories. New York governor Andrew Cuomo is also proposing similar legislation. He signed an executive order last year barring the state from undertaking such requests.

Emma

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

 

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