Dive Brief:

• A former account executive for Alliance Healthcare Services, Inc. has taken the company to court, claiming, among other things, that she was paid less than male reps (Paltz v. Alliance Healthcare Services, Inc., et al., No. 21-cv-00020 (D. Conn., Jan. 7, 2021)).
• The employee said in her complaint that in April 2019 she brought the alleged gender-based pay disparity to the attention of the company's president but did not receive a "substantive response." However, she said, in March 2020, her salary was increased by 7%, leaving her pay about 20% less than that of her male colleagues. The company and its officials tried to silence her by terminating her employment under the pretext of including her in a reduction-in-force, she alleged.
• The suit accused the company of violating the Equal Pay Act (EPA) as well as several other state and federal laws.

Dive Insight:

The U.S. Equal Employment Opportunity Commission (EEOC) continues to see "robust pay disparities" based on gender and other areas, such as race and national origin, even though it's been about half a century since the passage of the EPA and other anti-discrimination laws, EEOC Commissioner Charlotte A. Burrows told attendees in 2019 at the American Bar Association's 13th Annual Labor and Employment Law Conference.

Sixty percent of employers are actively working to achieve pay equity, according to the 2019 Pay Equity Practices Survey of C-suite and Reward Leaders conducted by WorldatWork and Korn Ferry. But for some — 7% — the topic isn't on their radar whatsoever.

Many companies striving for equal pay have been public about it. Nordstrom announced in August 2019 it had reached 100% pay equity for its employees, explaining that it examined base salaries and assessed whether employees with similar roles, levels of experience and performance were receiving equal pay for equal work. Starbucks, Citigroup and JPMorgan have also announced an intent to eliminate pay inequities for women and people of color. 

Prevention is the best way to get pay equity right, Burrows told attendees at the2019 conference, adding that employers should develop a firm understanding of the laws that prohibit pay discrimination and take several steps to avoid or unearth and address pay disparities.

Regular pay audits can help employers discover and rectify discriminatory pay practices, experts say. At a National Employment Law Institute conference in 2018, Zina Deldar, now corporate counsel at Affirm, Inc., and co-presenter Quenton Wright, principal at Charles Rivers Associates, recommended employers ensure the audit and its results are effective, accurate and privileged in the event of litigation.

If a disparity is discovered, an employers should first determine whether those subject to the difference in pay are performing equal or substantially similar work, Liz Washko, a shareholder at Ogletree, Deakins, Nash, Smoak & Stewart, previously told HR Dive. She explained that the reference to "equal work" applies to the federal Equal Pay Act while the reference to "substantially similar" work is applicable under some state pay equity laws.  

If the work is equal or substantially similar, Washko said, the employer should determine if there is a legitimate justification for the pay disparity such as meaningful differences in education, experience, training or performance; if there is no such justification, a remedy could include an adjustment in pay.

Employers also may need to note that several states and localities have prohibited employers from asking applicants pay history questions.