One of the prominent themes of President Obama’s 2012 re-election campaign was narrowing the so-called gender pay gap, in which he claimed women make $.77 for every dollar that men make. The President has attempted to follow through on this campaign pledge by instructing federal agencies to crack-down on pay discrimination. For example, companies with large pay disparities between men and women, or between racial groups, have had a more difficulty obtaining federal contracts.
However, employers who want to narrow the pay gaps in their workplace, either between men and women or between ethnic groups, have to be careful how they do so. In a number of cases, courts have held that raising the salaries of all employees of a particular gender or racial group may be illegal.
In one case, a university implemented a pay raise for all of its female professors. The male professors, however, did not receive raises. The male professors sued the university, arguing that it discriminated against them due to their gender, thus violating the Civil Rights Act of 1964. The court ruled in their favor, holding that the university discriminated against those professors by giving raises to only women.
In another case decided by the Supreme Court, the Court held that an employer cannot hire an employee just because he is a member of a certain racial group unless the employer has a very good reason to do so. This is the true even if the employer has few members of that racial group as employees.
Reducing the pay gap in the workplace is a laudable goal, and the cases mentioned above should not discourage employers from doing so. Instead, employers should work to reduce the pay gap in ways that do not overtly invoke gender or race. For example, if women in the workplace tend to be in a certain occupation, increasing the pay of that occupation is a way to reduce the gender pay gap without violating the law.
Furthermore, if there is strong evidence that an employer discriminated against a particular gender or racial group, then federal law permits the employer to raise the wages of the discriminated-against group without violating the law. This is known as an affirmative action program.
As we have said many times before, employers should avoid treating an employee in a particular way because of that person’s gender, race, pregnancy, etc. Even if an employer believes he is doing something positive by treating an employee differently based on these characteristics, he still may be violating the law. Ultimately, gender and race issues are potential landmines for employers, and we suggest contacting an experienced attorney when dealing with one.