As 2017 comes to a close, recent headlines have underscored the importance of compliance and training. In this Take 5, we review major workforce management issues in 2017, and their impact, and offer critical actions that employers should consider to minimize exposure:

  1. Addressing Workplace Sexual Harassment in the Wake of #MeToo
  2. A Busy 2017 Sets the Stage for Further Wage-Hour Developments
  3. Your “Top Ten” Cybersecurity Vulnerabilities
  4. 2017: The Year of the Comprehensive Paid Leave Laws
  5. Efforts Continue to Strengthen Equal Pay Laws in 2017

Read the full Take 5 online or download the PDF.

Several states have recently passed laws (California, Maryland,[1] and New York) or have bills currently pending in their state legislatures (California,[2] Colorado, Massachusetts, and New Jersey) [3] seeking to eliminate pay differentials on the basis of sex (and, in some cases, other protected categories) (collectively, “Equal Pay Laws”).

Among other provisions, most of the Equal Pay Laws contain four components. They aim to (i) strengthen current equal pay standards, (ii) create pay transparency rules, (iii) expand equal pay protections beyond gender, and (iv) redefine the geographic reach of existing equal pay laws.

Strengthening of Current Equal Pay Standards

The Equal Pay Laws modify the standards required for plaintiffs to prevail on equal pay claims. Previously, these laws tracked the federal Equal Pay Act, which permits exceptions to equal pay for equal work, “where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.” The Equal Pay Laws, however, each modify the fourth prong, so that they now permit pay differentials based on a “bona fide factor other than sex” (emphasis added). This additional language allows plaintiffs to bring claims alleging that a neutral factor produced a wage differential that disparately impacts employees based on their sex, and notwithstanding this impact, the employer did not adopt an alternative business practice that would serve the same purpose without resulting in the wage differential. The new standard also broadens a plaintiff’s ability to allege a prima facie case of wage disparity.

Pay Transparency

Many of the Equal Pay Laws include pay transparency provisions, meaning that employers cannot create policies or enforce rules that would restrict an employee’s ability to discuss his or her wages with co-workers. The Massachusetts bill, which is still in the state legislature, has another unique twist (one that actually passed the legislature in California earlier this year but was vetoed by the governor). The Massachusetts equal pay law would prohibit employers from asking about an applicant’s salary history on an application or during interviews for employment. This would mean that an employer could no longer ask applicants how much they earned at their past jobs when considering making an offer of employment to an applicant. This twist aims to ensure that prior pay discrepancies are not compounded when an applicant’s pay rate with a new employer is based on unequal pay rates that the applicant received in the past.

Expanding Beyond Pay Equality Based on Gender

While the Equal Pay Laws were initially intended to ensure that women received equal pay in relation to men, some of the Equal Pay Laws seek to expand equal pay protection to other protected categories. The proposed California law, which is intended to amend the recently amended equal pay law in that state, would expand protections to race- and ethnicity-based pay differentials. Further, Maryland’s recently enacted law requires equal pay based on gender identity.

Geographical Reach

Finally, the Equal Pay Laws differ as to their geographical scope. For example, the New York law limits the reach of pay differentials to “no larger than a county.” In other words, women cannot compare themselves to other employees outside the county where they work. Some of the other Equal Pay Laws have significantly broader reach, such as California, which has no geographic limit. The New Jersey law, which was vetoed on May 2, 2016, but may be reintroduced in the state legislature, would permit wage comparisons based on compensation rates “in all of an employer’s operations or facilities.” This could mean that New Jersey employees could base their equal pay claims on the pay differential between their own compensation and that of employees of the employer in other jurisdictions (even in locations where the standard of living is considerably higher). Unlike New Jersey, the law proposed in Massachusetts would permit employers to base pay differentials on geographic location if one location has a lower cost of living based upon the Consumer Price Index.


As a result of the Equal Pay Laws, employers should consider whether to perform an internal audit (with the assistance of counsel) in order to identify and address any potential pay disparities. Indeed, in light of the recently published regulations on the overtime exemption status of various employees, this summer may be a good time for employers to review their pay practices for all employees.

A version of this article originally appeared in the Take 5 newsletter Five New Challenges Facing Retail Employers.”

[1] Maryland’s equal pay law was signed by Governor Larry Hogan on May 19, 2016, and becomes effective October 1, 2016. New York’s and California’s laws are currently effective.

[2] California has introduced a second equal pay amendment addressing wage disparity based on race and ethnicity. The first equal pay amendment became effective on January 1, 2016.

[3] Louisiana’s equal pay bill was recently rejected in the state House committee, despite passing the Senate and having strong support from Governor John Bel Edwards.

Our colleague Nancy L. Gunzenhauser has a Technology Employment Law blog post that will be of interest to many of our retail industry readers: “Three States Seek to Bolster Fair Pay Laws.”

Following is an excerpt:

Following on the tails of recent updates in New York and California’s equal pay laws, New Jersey, Massachusetts, and California all have bills pending in their state legislatures that would seek to eliminate pay differentials on the basis of sex and other protected categories. …

While states are leading the charge with updates to equal pay laws, the EEOC is also stepping up equal pay enforcement with their proposal to modify the EEO-1 forms to include pay information. This push to gather more information regarding pay among various categories may lead to an increase in pay-related claims over the next few years. To help avoid such claims, employers should consider auditing job titles and compensation methods to ensure compliance with each jurisdiction’s equal pay laws.

Read the full post here.