Apple Faces an Equal Pay Claim— How Can Employers Avoid a Similar Fate?
By: Alejandro Pérez
Last week, two female employees filed suit against technology behemoth Apple Inc. purporting to represent a class of 12,000 employees. In their suit, linked below, the plaintiffs allege violations of federal (the Equal Pay Act of 1963 (EPA)) and state equal pay laws.
Specifically, the purported class contends:
🍎 Apple willfully paid male employees more than female employees for substantially similar work;
🍎 Apple failed to maintain records of wage rates, job classifications, and pay decisions; and
🍎 Apple relies solely on applicants' prior pay and and salary expectations in order to set salaries.
Apple is no outlier. Equal pay lawsuits are on the rise. Considering the patchwork of state and federal laws that apply in this setting, defending these cases can prove difficult.
Pexels @Pixabay
To make out a prima facie case of equal pay discrimination, which is a type of sex discrimination, the class has the burden to show that the skill, effort, and responsibility required in their job performance equaled those of higher-paid males. The work did not need to be identical, just substantially similar.
To effectively rebut the class’s claim, Apple has to prove affirmatively that a pay differential between similarly situated male and female employees is defensible due to (1) a seniority system; (2) a merit system; (3) a pay system based on quantity or quality of output; or (4) a disparity based on any other factor other than sex.
Here are some best practices to avoid getting dragged into the fray:
💲 Stay abreast of pay transparency and pay data reporting laws. Consider these laws and how they impact your current policies. Also consider these laws when determining which positions can work remotely. In sum, it is essential to understand how these laws impact your current practices.
💲 Document, Document, Document! Make sure you are documenting all pay decisions. The worst thing you can have is a disparity in pay that cannot be explained.
💲 Train your decision makers on the laws applicable to determining and setting pay.
💲 When hiring, don't ask for the applicants for their salary information or salary history. Because pay gaps have been ongoing, relying on this information to set salaries will likely be found to perpetuate longstanding pay disparities.
💲 Implement clear policies for determining starting pay, pay increases, and bonuses. You also want to closely evaluate performance evaluation, merit increase, and promotion processes.
💲 Audit pay data to identify pay disparities and weaknesses. While typically not required, these proactive measures can assist in identifying issues and allow employers an opportunity to make corrections.
💲 Take APPROPRIATE corrective measures to address pay disparities that are not easily explained. Be careful in doing this, though. While employers may reduce pay for a variety of reasons (e.g. market adjustments), the Equal Pay Act expressly prohibits reducing an employee's pay solely for the purpose of correcting a pay equity issue. On the other hand, some appropriate corrective actions might include amending pay policies, clarifying pay ranges/bands, and, in certain cases, making appropriate adjustments to employees’ pay or job titles.
My colleagues and I here at Pierson Ferdinand LLP are standing by to assist you in navigating the sea of equal pay laws, coming up with pragmatic solutions to resolve any pay inequities, and remediating any pay inequalities in a ways that don’t run afoul of the applicable laws.