Dive Brief:
- A federal court last week ruled in favor of the U.S. Equal Employment Opportunity Commission (EEOC) after it alleged that PS Holding LLC violated the Equal Pay Act when the company hired two employees — one female and one male.
- Plaintiffs Jensen Walcott and Jake Reed applied to be "pizza artists" at Pizza Studio, owned and operated by PS Holding LLC. Reed and Walcott were both hired, but when discussing their pay, Walcott learned that Pizza Studio offered Reed 25 cents more per hour. When Walcott contacted the restaurant about the disparity, it rescinded both job offers.
- Federal District Judge Carlos Murguia awarded Walcott and Reed back pay for lost wages. He also ordered the company to pay them compensatory, liquidated and punitive damages. Though the store at the center of the case has since closed, PS Holding LLC was ordered to make policy changes, hold training sessions, collect and assess data and report complaints to the EEOC to prevent future violations, since it still owns and operates other Pizza Studios across the country.
Dive Insight:
Companies need to take notice of cases like this. Recruiters and hiring managers must understand the law and, when a disparity is discovered, an employer can choose to rectify it, rather than retaliate, as EEOC alleges Pizza Studio did.
Employers also can review their pay practices and make necessary adjustments. And while not every company can put up $6 million to correct pay differences the way Salesforce did, employers can set pay policies to ensure all workers who perform the same duties are paid equitably.
Companies also must understand that workers are going to talk about their pay. Former Google employees gathered pay data showing rate disparities and published the information. Employers might avoid being "outed" by workers and confronted by government agencies if they have and enforce fair pay policies, and are transparent about how pay rates are set.
