You Make The Call: Can woman who made more than man claim unequal pay?

“I just don’t understand how Jennifer can sue us under the EPA, the Equal Pay Act,” said Supervisor Margie Brunton.

“Why do you say that?” asked HR Manager Alan Frankel.

“Jennifer claims that she was paid less than a male coworker who had the same job title that she did,” said Margie. “However, when you consider bonuses and commissions, Jennifer actually made more in total compensation than her male coworker did.”

“That’s a good point,” said Alan. “However, Jennifer claims that she was paid at a lower hourly rate than her male colleague was, so she’s justified in pursuing her EPA lawsuit. Why did we terminate Jennifer?”

“We didn’t really fire Jennifer,” said Margie. “We reassigned her to a different job, but she thought the new position amounted to a demotion, so she refused the transfer. That’s when we ended her employment.”

“Jennifer claims that the job reassignment would’ve meant a pay cut and, worse, she would’ve had to report to a male colleague who used to report to her,” said Alan. “She said it was a nonstarter for her.”

“It was her decision to not accept the transfer,” said Margie.

“Jennifer claims that she was a solid performer for us,” said Alan. “She notes that she won numerous prizes and equity awards during her time here.”

“She was a good performer,” said Margie. “But we needed to rearrange job duties, and Jennifer didn’t want to go along with it. The bottom line is that Jennifer made more total money than her male coworker did. We should fight this lawsuit.”

Did the company win?

No. The company lost. The court refused to dismiss the woman’s Equal Pay Act (EPA) lawsuit.

According to the judge, the wording of the EPA is clear: A woman can’t be paid at a lower rate than a male coworker performing the same job. The issue isn’t the total compensation paid to the man and to the woman; rather, it’s the rate at which each person is paid.

In this case, the evidence indicated that the woman was paid at a lower rate than her male coworker, even though she made more in total annual compensation then he did, so the lawsuit could proceed.

To rule otherwise, said the court, would mean that an employer could pay a woman $10/hour and a man $20/hour and it would still be legal – as long as the woman worked twice as many hours as the man did.

What it means: It’s the rate of pay that matters

In your efforts to maintain compliance with the EPA, keep in mind that you have to consider the rate of compensation provided to male workers and to their female colleagues rather than the total compensation of each one.

So that means the hourly rate or salary of each person must be the same if they’re performing the same job.

That’s why it’s a good idea to confirm that female and male employees handling comparable jobs are being paid at the same rate.

Based on Sempowich v. Tactile Systems Technology.

(From the Jan. 7, 2022, issue of HR Managers Legal Alert for Supervisors. To start you no-obligation trial subscription to the publication right now, please click here.)