Equal Pay Act
The Equal Pay Act of 1963 requires you to pay men and women equally for equal work in the same establishment.
The Act amends the Fair Labor Standards ActFLSA. The Fair Labor Standards Act (FLSA) is the federal law setting minimum-wage, overtime, recordkeeping, and youth employment standards for covered employment.Click to open the term. Jobs count as equal when they demand substantially equal skill, effort, and responsibility under similar working conditions. Actual duties decide it, not job titles. The Act reaches wages, overtime, bonuses, commissions, and other compensation, not base salary alone. A pay difference is lawful when it rests on a seniority system, a merit system, or a factor other than sex. A system measuring earnings by quantity or quality of production also qualifies. You carry the burden of showing which defense applies.
How does payroll data support an equal-pay review?
Payroll data is where an equal-pay review starts, because the comparison needs actual paid compensation, not the figure on an offer letter. Recordkeeping follows the Fair Labor Standards Act rules you already apply to wage records, plus any longer state requirement. State equal-pay laws often set a broader comparison standard, so confirm the rules that apply at each work location.
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Pull actual paid compensation. Each employee’s base rate, hours, overtime premium, bonuses, commissions, and shift differentials.
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Group the results by the job content being compared and by the establishment where the work happens.
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Add effective-dated pay history. A gap that opened three years ago and was partly closed since still shows in year-to-date earnings.
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Interpret with counsel. Reading the results is legal work, not payroll work, so you generally run the comparison with counsel or another qualified professional.
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.