PRIOR SALARY HISTORY MAY NOT ALWAYS BE LAWFUL BASIS TO SET PAY

The Equal Pay Act provides that men and women should receive equal pay for equal work. In a recent case, Rizo v. Yovino, No. 16-15372 (Apr. 9, 2018), the United States Court of Appeals for the Ninth Circuit held that an employer cannot justify a wage difference between male and female employees by relying on prior salary. In looking at this issue, the Ninth Circuit conclusively held that prior salary alone, or even in combination with other factors, cannot justify a wage differential between a woman and man performing the same job.

The case involved an employer that paid a female employee, Aileen Rizo, less than her male colleagues for similar work. The employer argued that it had not violated the Equal Pay Act because it reached the decision to pay Rizo a different salary based upon her salary history, which, according to the employer, was a factor other than her sex and therefore a proper consideration.

The Court emphasized that prior salary is not a legitimate measure of work experience, ability, performance or any other job-related quality. Going further, the Court declared that using prior salary to determine pay between two equally qualified and experienced colleagues would only perpetrate the wage disparities prohibited by the Equal Pay Act.

Rather than salary history, the Court noted that an employer may properly look at prospective employees' experience, educational background, abilities or prior job performance when setting their salaries, as these traits are all unrelated to sex. Rizo provides the following guidance for employers: do not offer a female employee a lower salary than a male colleague to perform the same work if that decision is based on the female employee's prior salary history.

PLDO's experienced employment law attorneys and litigators can answer any questions concerning this issue for you or your organization. Please contact PLDO Partner Matthew C. Reeber at 401-824-5100 or email [email protected] for more information. We welcome your comments, questions or suggestions.

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