Pay and Benefits

You must fairly compensate employees for their work. Under one federal law, women and men have the right to receive equal pay if they perform equal work in the same workplace. This law covers most employees across both the public and private sectors and does not require a minimum number of employees. The law considers whether the jobs or work are “substantially equal,” not whether they are identical. Job content (not job titles) is what determines whether jobs are “substantially equal.” All forms of compensation are covered by this law, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits. 

Another federal law also prohibits most employers with at least 15 employees from discriminating based on sex (among other categories like race, color, religion, and national origin) in pay and benefits. Under this law, however, there is no requirement that the jobs be “substantially equal.” The following are examples of evidence that may demonstrate sex-based discrimination: 

• discriminatory application of a wage policy or system, or wage-setting techniques that are discriminatory;
• barriers to equal access to higher paying jobs; 
• intentionally lowering wages because of the sex of the employees in the job; or
• a seemingly fair compensation policy or practice that has a significantly negative impact on employees in a protected class without a demonstration that the policy or practice is job-related and consistent with business necessity.

Furthermore, Executive Order 11246 prohibits certain federal contractors and subcontractors from discriminating in employment decisions, including pay, on the basis of sex (as well as race, color, religion, sexual orientation, gender identity, and national origin. Section 503 of the Rehabilitation Act of 1973, prohibits federal contractors and subcontractors from discriminating in employment (including pay) against individuals with disabilities. The Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) prohibits federal contractors and subcontractors from discriminating in employment (including pay) against protected veterans.