VOLUME II Chapter 20 Equal Pay

• Jurisdiction: South Carolina

Chapter 20 Equal Pay¹M. Malissa BurnetteBurnette Shutt & McDaniel, PAAshley C. StoryWhite & Story, LLC

I. Overview

Nearly 50 years ago, President Kennedy signed into law the Equal Pay Act of 1963 in an era when women were paid an average 59 cents to the dollar earned by their male counterparts. By 1970, the gap had narrowed only slightly, to 62 cents on the dollar. In 2014, women were paid 83 cents for every dollar paid to men for similar work.² In South Carolina, however, the gap remained at 80 cents to a man's dollar in 2015.³ The recent census revealed that South Carolina women still earn only 78 cents for the same work for which their male counterparts are paid one dollar.⁴

The Lilly Ledbetter Fair Pay Restoration Act⁵ was signed into law by President Barack Obama on January 29, 2009, thus nullifying the 2007 Supreme Court ruling in Ledbetter v. Goodyear Tire & Rubber Co., Inc.⁶ The new law acknowledges that discrimination in compensation occurs each time wages, benefits or other compensation is paid resulting from a discriminatory act or decision. Each gender-unequal paycheck issued constitutes a new violation.

A guarantee to free and open access is necessary, as illustrated by the facts of the Ledbetter case, because many women traditionally have been unable to obtain information about the compensation of co-workers to know whether they are being fairly paid.

The issue of equal pay between the genders is one that regularly arises in employment discrimination litigation. Two major provisions currently govern this area of federal law: the 1963 Equal Pay Act ("EPA") and Title VII of the 1964 Civil Rights Act, as amended by the 1991 Civil Rights Act. Each law addresses pay discrimination in distinctly different ways. This chapter is intended to serve as a starting point for the practitioner who encounters the issue of equal pay. It will cover the major provisions of the EPA, the applicable provisions of Title VII, and discuss the pertinent differences between the two.

The number of Title VII cases filed each year with the Equal Employment Opportunity Commission ("EEOC") is much greater than complaints the agency receives for alleged EPA violations. The agency tracks the number of EPA cases that are filed concurrently with Title VII, Americans with Disability Act ("ADA"), and Age Discrimination in Employment Act ("ADEA") charges. Its figures show a steady decline in the number of EPA cases filed along with other charges over time, even after the passage of the Ledbetter law. From 2011 to 2013, EEOC received an average of 1006 EPA complaints per year. From 2014 through 2016, EEOC received on average of only 995 EPA complaints per year.⁷

II. Equal Pay Act

A. The Statute

The EPA, an amendment to the Fair Labor Standards Act ("FLSA"),⁸ provides:

No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions . . . .⁹

The statute deals solely with the issue of equal pay and does not cover employment discrimination in hiring, promotion, terms and conditions of employment or discharge.

B. Basic Provisions of the EPA

The first important inquiry under the EPA is determining who is covered under the Act. The EPA states that employers and employees are covered by the Act, but it does not offer clear definitions of those terms. Section 203(d) of the FLSA defines employer as "any person acting directly or indirectly in the interest of an employer in relation to an employee and includes a public agency . . . ."¹⁰ The Supreme Court has ruled that this definition is to be read expansively.¹¹ Accordingly, courts have held state and local governments are to be included in this definition.¹² There has been some debate over whether individual officials, in addition to the corporations they represent, may be considered "employers." Authority is split on this question. Courts holding that such officials are "employers" for purposes of the statute have focused on the official's relationship to the employee and the official's involvement in the setting of the employee's wages. The opposing view takes the position that no further relief can be expected from the official when a corporate defendant remains a party to the lawusit¹³ or reasons that the actions of a supervisor were taken as an agent of the employer.¹⁴

The right to bring suit under the EPA belongs to "employees" who are subject to any provision of the FLSA.¹⁵ Individuals within this definition include those "employed by an employer"¹⁶ who are "engaged in commerce" or in "the production of goods for commerce" or who are "employed in an enterprise engaged in commerce or in the production of goods for commerce."¹⁷ "Commerce" encompasses a host of activities, including "distribution of goods that move in interstate or foreign commerce, wholesaling or retailing of such goods," and any number of other functions related to these types of activities.¹⁸ Further, employees are considered to be engaged "in the production of goods for commerce" if their employment function is either directly related to the actual production of such goods or in any way essential to the production of such goods.¹⁹ Such activities would include bookkeeping, advertising, promotion, maintenance, and other similar functions.²⁰

The enterprise portion of this test focuses on the nature of the employer's business. Enterprise is defined as "the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose . . . ."²¹ For an enterprise to be considered "engaged in commerce or in the production of goods for commerce" it must be:

1. an enterprise;
2. engaged in interstate commerce or in the production of goods for interstate commerce;
3. with two or more employees so engaged; and,
4. except for hospitals, schools, and nursing homes enterprises, or activities of a public agency, the enterprise must have an annual gross volume of sales or business of $500,000, excluding retail excise taxes.²²

Overall, the definition of employee is broad and includes executives; administrators; professional employees; state and local government employees, except those specifically exempted from the FLSA;²³ and applies equally to men and women.²⁴ An individual will not be considered an employee under the EPA if she is not subject to the civil service laws of the state, political subdivision, or agency which employs her and (1) holds a public elective office of that state, political subdivision, or agency; (2) is selected by the holder of such an office to be a personal staff member; (3) is appointed by such an officeholder to serve on a policy-making level; or (4) is an immediate adviser to such an officeholder with respect to the constitutional or legal powers of his office.²⁵

Specific categories of employees are exempted from the EPA, such as certain agricultural workers and computer systems analysts, programmers and software engineers.²⁶

C. Burden of Proof Under the EPA

The plaintiff has the initial burden to establish a prima facie case that the employer has violated the provisions of the EPA. As such, the plaintiff must show: (1) that different wages are paid to employees of the opposite sex; (2) in an establishment where the employees do equal work which requires equal skill, effort, and responsibility; and (3) that the employees have similar working conditions.

The term "wages" includes all forms of compensation, including fringe benefits.²⁷Courts must generally wrestle with the question of whether the wages in question are "different." While authority is not clear on this question, in some instances "different wages" has been given a literal meaning. Accordingly, regardless of the workload, if the rates of pay are the same, the wages are not "different."²⁸

"Establishment," as used in the second element, provides a context for wage comparison. It refers to a "distinct physical place of business rather than to an entire business or 'enterprise' which may include several separate places of business."²⁹ Generally, this definition has precluded the comparison of wages in different stores or plants; however, if the employer has highly centralized administration of accounting and personnel functions, it may be considered a single establishment even if the areas of comparison are physically separate.³⁰ Likewise, an identity of duties, similar working conditions, and a practice of interchanging employees between work locations may result in two physical locations being treated as one establishment.

With regard to "equal work," the plaintiff must compare herself to another employee. Courts have interpreted this requirement to mean contemporaneous workers in a particular job or even successive employees in the same job.³¹ Generally, whether the work of the two employees is equal or not will be more heavily dependent on job content and performance rather than job title.³² It is not necessary for the jobs to be identical in every respect; they need only be substantially equal for the spirit of the statute to be upheld.³³This view was enunciated by the Fourth Circuit Court of Appeals: "[t]he crucial finding on the equal work issue is whether the jobs to be compared have a 'common core' of tasks, [i.e.,] whether a significant portion of the two jobs is identical."³⁴ However, it is insufficient merely to show that "some" aspects of the two jobs are identical.³⁵

In Wheatley v. Wicomico County, Maryland,³⁶ two female supervisors of a county emergency services department claimed that the county paid its male department heads...