When it comes to paying your employees, the Equal Pay Act (EPA) is clear: men and women doing substantially equal work must receive equal pay. It’s one of the cornerstones of workplace fairness, and it’s been on the books since 1963.
Quick history & who enforces it
The EPA was signed into law by President John F. Kennedy as part of his “New Frontier” agenda to reduce wage inequality. It amended the Fair Labor Standards Act and is enforced by the Equal Employment Opportunity Commission (EEOC).
Employees can also bring private lawsuits, often alongside Title VII of the Civil Rights Act, which also prohibits sex-based pay discrimination.
Who the EPA covers
The EPA applies to:
- Virtually all employers covered by the FLSA (interstate commerce + $500,000 annual sales threshold, or individual coverage).
- Both men and women — the law is gender-neutral, even though it was designed to address pay gaps facing women.
- All forms of compensation, including wages, salaries, overtime, bonuses, stock options, profit sharing, vacation, and benefits.
What the Equal Pay Act requires
The law requires equal pay for equal work. Jobs don’t need to be identical, but they must be substantially equal in terms of:
- Skill: education, training, and experience needed.
- Effort: the physical or mental energy required.
- Responsibility: the level of accountability in the role.
- Working conditions: the environment where the work is performed.
If two employees—regardless of gender—do substantially equal work, they must be paid equally.
When pay differences are allowed
The EPA recognizes that not all pay differences are discrimination. Employers may pay differently if the difference is based on:
- Seniority system
- Merit system
- Quantity or quality of production
- Any factor other than sex (for example, shift differentials, geographic location, experience, or specialized skills)
The key is that the factor must be legitimate and applied consistently.
What the EPA doesn’t cover
Like the FLSA, the Equal Pay Act has limits. It does not:
- Guarantee raises or promotions beyond equal pay requirements.
- Cover discrimination based on race, age, religion, or disability (other federal laws do that).
- Require identical job titles to mean identical pay—substance matters more than labels.
- Apply to independent contractors or volunteers.
Penalties for breaking the Equal Pay Act
Violating the EPA can be costly. Employers may face:
- Back pay for up to two years (three years for willful violations)
- Liquidated damages equal to back pay (doubling the amount owed)
- Attorney’s fees and court costs if employees sue and win
- EEOC enforcement actions or private collective lawsuits
And just like with the FLSA, retaliation is illegal. Cutting hours, firing, or demoting someone for raising equal pay concerns often costs more than the original pay gap.
Common employer mistakes under the EPA
- Assuming job titles determine pay requirements (it’s about the work, not the label).
- Justifying pay gaps without solid documentation (like “he negotiated harder”).
- Relying on prior salary history to set pay—several states now ban this practice.
- Failing to regularly review compensation data across departments or locations.
- Overlooking benefits in equal pay compliance (healthcare, bonuses, leave policies).
How to stay compliant with the EPA
- Conduct pay audits – Compare wages across roles by gender; flag unexplained differences.
- Document pay decisions – Keep clear records of why employees are paid at certain rates.
- Review job descriptions – Focus on actual duties, skills, and responsibilities.
- Train managers & HR – They should understand the difference between legal and illegal pay practices.
- Stay updated on state laws – Many states go beyond the EPA, requiring pay transparency or banning salary history questions.
- Fix issues proactively – If you discover gaps, adjust pay rather than waiting for a claim.