In a conundrum with profound implications, a federal appeals court will revisit whether – in some circumstances — men can be paid more than women for the same job.
On the surface, that conflicts with the Equal Pay Act. But a three-judge panel of the 9th Circuit ruled in April that salary history could justify unequal pay. In essence, the panel determined the male hires in question were paid more because of their last paycheck and that their gender was a coincidence.
The EEOC appealed, saying that the ruling perpetuates the gender gap and conflicts with precedent in other circuits. The full 9th U.S. Circuit Court of Appeals has agreed to review the case, with oral arguments set for December.
She was hired at less pay than all the men in her job
Aileen Rizo, a math consultant, took a job with the public schools in Fresno County, California. Her $62,000 salary was a nice bump from her previous teaching job. But she soon learned that a male colleague was hired at $79,000 for the same job. Further investigation revealed that all her male colleagues earned more.
When human resources did not act on her complaint, Rizo sued for employment discrimination. The school district’s rationale was that the men’s higher pay was based on their salary history. Per county policy, starting pay was determined by adding 5 percent to the hiree’s preceding salary.
The Equal Pay Act allows unequal pay for men and women doing the same work if the disparity is based on factors other than gender, such as seniority. In ruling against Rizo, the appeals court panel cited a prior 9th Circuit decision that salary history can be a factor if the practice (a) effectuates some business policy and (b) is implemented in a reasonable way.
Salary history exception may perpetuate the wage gap
The Equal Employment Opportunity Commission (EEOC) strongly disagrees and appealed the panel’s ruling. Before the 9th Circuit took up the review, the panel had remanded the case to the trial court to explore the “business reason” for the Fresno County salary policies.
The EEOC contends that the ruling enables the pay gap’s vicious cycle. If men are routinely paid more than women, their salary history will dictate they be paid more at the next job, and so on. The American Association of University Women, which studies the gender pay gap, says the wage gap is partially rooted in outdated concepts of men as family providers. For example, AAUW statistics reveal that women who are moms earn less than their female peers (the “Motherhood Penalty”), but men who are dads are paid more than average (the “Fatherhood Bonus”). This bias can be perpetuated in salary history and parental leave policies.
The AAUW says that women earn, on average, 80 percent of their male counterparts. The wage gap varies, but it is true across all industries and all levels of employment, including public sector employees. There is already a pay gap when females enter the workforce in their teens. While women tend to top out in salary in their 40s, male salaries continue to rise into their 50s and 60s.
On the other hand, many economists say it’s a myth that women are paid 80 cents on the dollar compared to men. Rather than a wage gap, they say, it’s an earnings gap. Men gravitate toward – or have more access to – higher-paying jobs. Some moms drop out of the workforce or scale back. Et cetera. Without settling the broader pay gap dispute, the 9th Circuit case is in fact about unequal pay for equal work.