Salary Negotiations or Racial and Gender Pay Discrimination: How Can You Tell?

Businesswoman Showing Cheque At Office

Whether you are applying for a new position, or asking for a raise, the idea of demanding more money from an employer is often nerve wracking. But what if you are being underpaid because of your race or gender? How can you tell if your pay is based on salary negotiations or racial or gender pay discrimination?

In this blog post, I will look at the factors the EEOC and the courts consider in determining whether differences in salaries are based on racial or gender pay discrimination. I will explain how the Equal Pay Act protects workers from being paid less for the same work, and will review common defenses by employers that may make proving your case more difficult.

Women, Minorities Get Paid Less for the Same Work

Every year, Equal Pay Day happens in early April (this year it was April 2). This date represents how far into the new year women have to work to earn the same amount as men in the previous year. In other words, this represents how big the gender pay gap is in the U.S.

According to the most recent data from PayScale, women earn approximately $0.79 for every $1 men earn in 2019. Even when you compare employees with the same title and qualifications, women still earn less than men. This number has improved over recent years, but not by much. In 2015, women earned $0.74 per $1 men earned. The numbers are also worse for employees in many racial minorities. Black or African American workers are still stuck at $0.74 per $1. Only Asian American women fair better than average at $0.93 per $1.

Title VII, the Equal Pay Act, and Pay Discrimination

State and federal law makes it illegal to pay women or minority workers less for the same work. Title VII of the federal Civil Rights Law includes salary, raises, and promotions in the definition of “adverse employment actions.” If these decisions are made based on any protected status -- including sex, gender, or race -- an employee is entitled to file a pay discrimination complaint with the Equal Employment Opportunity Commission.

Also, state and federal Equal Pay Acts specifically protect against gender pay discrimination. The New York State Equal Pay Act uses the same language as the federal law. In both cases, the law requires that men and women be given equal pay for work equal work in the same establishment. That doesn’t mean that cashiers in the same location of the retail store all receive the same wage. The laws don’t depend on titles to determine who gets paid how much. Instead, they depend on whether the jobs require substantially equal:

  • Skill (including experience, certifications, ability, education, and training)
  • Effort (including physical or mental exertion)
  • Responsibility (including accountability)
  • Working conditions (including physical surroundings and work hazards)
  • Physical place of business

Once an employee demonstrates that she was paid less than her coworkers for substantially equal work, it is up to the employer to justify the difference. The federal Equal Pay Act allows for 4 exceptions:

  • A seniority system
  • A merit system
  • A pay system based on quantity or quality of output
  • Any other factor other than sex

The last factor (called a “catch all” provision) has been used by employers to claim that differences in pay aren’t a result of gender pay discrimination. They are simply the result of men being better at salary negotiations than women.

Can Salary Negotiations Justify Racial and Gender Pay Discrimination?

Women can face difficulty negotiating for a higher starting salary or getting raises. Harvard Law School’s Program on Negotiation, described the intersection of salary negotiations and gender discrimination by saying:

“Yet its persistence in the workplace presents a personal negotiation challenge that asks women to reconcile their needs with how they present those needs to their counterparts.”

Siegel Bernard of the New York Times has described this conversation as trying “to juggle when they are on a tight rope.”

But whether or not it is difficult, do differences in the way men and women engage in salary negotiations excuse a company for paying women less? Basing a person’s salary on what he or she made at the last job can perpetuate systemic gender pay discrimination. Last year, in Rizo v Yovino, the Ninth Circuit Court said that “any other factor other than sex” necessarily means legitimate, job-related factors like experience, educational background, ability, or prior job performance. The court said that prior salary alone was not enough to justify gender pay differences.

That decision was vacated by the U.S. Supreme Court on February 25, 2019, but not because the Court disagreed with the ruling. Circuit Court Judge Stephen Reinhardt was listed as part of the majority in the Ninth Circuit decision, but he had died before the opinion was final. The Supreme Court said that was inappropriate and sent the case back to correct the error. Whether the Ninth Circuit stands by its decision on remand remains to be seen.

In the past, the Supreme Court has held that differences in the market value of men and women’s services “became illegal once Congress enacted into law the principle of equal work for equal pay.” Glass Works v. Brennan, 417 U.S. 188, 205 (1974). However, since then, the courts have been split on whether salary negotiations were enough of a reason to pay men more. That means whether an employer can use salary negotiations as its reason for why it pays men more than women could depend on where the employee lives or works.

If you are facing racial or gender pay discrimination, you need an employment discrimination who knows the law, and the courts, to help you make your case. At Eisenberg & Baum, LLP, we will help you review your situation and decide your best course of action to getting equal pay for equal work. No matter which strategy is best for you, we will help you fight to stop gender pay discrimination. Contact Eisenberg & Baum, LLP, today for a free consultation.

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