Schools’ Use of Salary History in Setting Pay to Get Second Look

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By Jon Steingart

Whether the Fresno County, Calif., school system violates a gender pay equity law by using salary history in setting pay for its workers will get another look by a federal appeals court ( Rizo v. Yovino , 2017 BL 303715, 9th Cir., No. 16-15372, en banc review granted 8/29/17 ).

The U.S. Court of Appeals for the Ninth Circuit will review whether the school system is correct that its consideration of a worker’s salary history when setting initial pay is lawful, Judge Sidney Thomas wrote in an Aug. 29 order.

A three-judge panel in April ruled that the county may be able to show that it based a female math consultant’s pay on business reasons that factor in her work experience and level of education, dismissing her claim that the school system violated the Equal Pay Act. The act prohibits disparate pay for women and men who perform equal work unless the variation is attributable to a factor “other than sex.”

The appeals court panel sent the case back to a federal trial court for a determination of whether the county’s business reasons for considering salary history are reasonable. Thomas’ order vacates the April ruling and means the case will remain in the appeals court for now. He scheduled oral argument the week of Dec. 11.

“It was a disturbing opinion because it said it’s OK to pay women less than men because women are paid less,” Emily Martin, general counsel and vice president for workplace justice at the National Women’s Law Center in Washington, told Bloomberg BNA Aug. 30. The NWLC and a coalition of civil rights organizations filed a brief urging the court to grant en banc review.

Salary History Inquiries Banned in Some Areas

The use of worker salary history in setting pay has drawn condemnation from critics of the pay gap between women and men who say determining pay based on what someone earned previously carries pay inequities from one job to the next. Several state and local governments, including Oregon, California, New York City, and Philadelphia, have enacted laws banning salary history inquiries.

“It’s smart for employers to look forward on this issue because we’re going to see more states and jurisdictions pass these types of laws,” Michael Bracken, senior counsel at the Washington-based Center for Workplace Compliance, which advises employers, told Bloomberg BNA Aug. 30. “Employers can’t wait any longer.”

A bill in Congress would limit the sort of employer explanations that mighty justify a pay disparity, Nicole Porter, an employment discrimination law professor at the University of Toledo, told Bloomberg BNA Aug. 30. The Paycheck Fairness Act (S.819; H.R.1869) says “if you’re paying men and women differently,” it has to be for “a reason that’s job-related and consistent with business necessity,” she said.

An example of an employer explanation that currently might satisfy the “other than sex” standard would be giving a salary boost to employees who are heads of households, Porter said. “It’s undeniable, over the long run,” that that would benefit men more than women, she said. An employer would have a harder time justifying higher pay for heads of households as a business necessity, she said.

—Patrick Dorrian contributed to this story.

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

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