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Yesterday, April 9th, 2018, the Ninth Circuit ruled in the Rizo v. Yovino (“Rizo”) case that employers may not justify wage gaps between men and women by relying on the employee’s salary history alone under the federal Equal Pay Act (“EPA”). The EPA prohibits employees from being paid differently for similar work, except where the difference in pay is because of seniority, merit, the quantity or quality of the employee’s work, or “any other factor other than sex.”

In Rizo, plaintiff Aileen Rizo sued Jim Yovino, the Fresno County Superintendent of Schools, claiming that the county had violated the EPA. According to the plaintiff, the county’s practice of paying new hires five percent more than what they earned in their previous job carries forward pay gaps that are discriminatory toward women. The employer argued that the policy did not violate the EPA because past pay was a permissible “factor other than sex.”

Following an appeal from the district court, the Ninth Circuit concluded that prior salary alone cannot justify a wage differential—to allow employers to capitalize on the persistence of the wage gap only continues the problem, which is why the EPA was created in the first place.

In other words, allowing prior salary to justify a wage differential perpetuates the message that women are not worth as much as men and implements a means of discrimination in salary systems.

COUNSEL TO MANAGEMENT:

In California, employers are already prohibited from asking about an employee’s salary history under AB 168; you can read about that here. However, employers should now take note that salary history alone will not justify a wage differential between employees. If you have any questions about how this decision may affect your company, or questions about gender discrimination claims, please contact the experts at The Saqui Law Group.

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