Gender & Salary in the Workplace

By Business & Finance Last updated Saturday, May/25/2024

History

The U.S. has a long history of fighting for pay equity, and women have come a long way. Consider that in 1932, the government passed a law stating that women with employed husbands be the first to go in the event of company layoffs. Throughout the 1940s and 1950s, equal pay bills were brought up but it wasn't until 1963 that the Equal Pay Act was passed to ensure "equal pay for equal work." In 1964, the Civil Rights Bill was passed and included Title VII, which banned employment discrimination.

The Equal Pay Act, or EPA, states that employers must pay workers, regardless of gender, the same rate for the same work. However, the rule applies only to base salaries, not total compensation. That means paying sales people based on the business they generate is not a violation of the EPA. The EPA also stipulates equal benefits like health insurance, pensions, vacation time and holidays. In the case where two people are performing similar jobs but one has a few extra responsibilities, it is legal for their pay to differ, however, companies that place one gender in those higher paying positions usually find themselves in violation of the EPA.

Over 50 percent of all women in the workforce are concentrated in sales, clerical and service jobs. Studies have shown there is a disparity in pay rates for jobs and occupations typically dominated by women. Additionally, the more women and minorities are associated with a certain occupation, like social work, teaching or administrative jobs, the less those jobs pay. In a study by the state of Minnesota, the gap in pay for jobs that are female-dominated pay as much as 20 percent less than male-dominated occupations.

The pay gap is decreasing. In 2009, President Barack Obama signed the Lilly Ledbetter Fair Pay Restoration Act expanding women's ability to sue companies that violate the EPA. Lilly Ledbetter is a woman who lived in Alabama and sued Goodyear after finding out that she had been paid less than her male counterparts for 19 years. Ledbetter lost the case after the court deemed she should have filed within 180 days of being paid unequally. The new law will help ensure that women who learn they are being paid less can attempt to use the law to remedy the situation.