United States: Alabama's New Pay Equity Law Takes Effect September 1, 2019

Alabama became the 49th state to adopt equal pay legislation when Governor Kay Ivey signed the Clarke-Figures Equal Pay Act (CFEPA) on June 11, 2019. The CFEPA, effective September 1, 2019, prohibits an employer from paying an employee less than another employee of a different race or sex for equal work.

How Does the CFEPA Compare With Existing Federal Law?

The CFEPA tracks existing federal laws such as the federal Equal Pay Act (EPA) of 1963 and Title VII of the Civil Rights Act of 1964, with a few key changes.

Prohibition on Discrimination. The EPA prohibits an employer from paying an employee a lower wage rate than an employee of another sex for equal work in the same establishment, where job performance requires "equal skill, effort, and responsibility" and occurs "under similar working conditions." The CFEPA adopts almost identical language but adds "education" and "experience" to the list of job performance requirements.

Race. The EPA prohibits sex-based wage discrimination, while the CFEPA prohibits both race- and sex-based wage discrimination. However, the CFEPA does not provide greater protection than federal law because Title VII prohibits discrimination based on an employee's race, color, religion, sex, or national origin.

Exceptions. Both the CFEPA and the EPA identically provide that there is no violation where an employer bases a wage differential on a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or any factor other than sex or race.

Wage History. The CFEPA goes farther than the EPA by prohibiting an employer from refusing to "interview, hire, promote, or employ," or retaliating against an applicant, because the applicant fails to provide wage history. Other states have completely banned wage history requests, but federal law presently does not. The CFEPA may provide a new path to court for employees claiming discrimination for not providing wage history, and it raises the stakes for pay-history inquiries during the selection process.

Pleading Standard. The CFEPA contains a heightened pleading standard for employees. Rather than merely stating a "plausible" claim, as with the EPA, employees must "plead with particularity" that (1) the employer violated the act, and (2) that the alleged wage differential is not due to one of the four permissible exceptions listed above. Alabama courts might interpret this standard to require employees to identify a comparator of a different race or gender in the complaint. Ultimately, the pleading standard's impact will develop as litigation progresses through Alabama's courts.

Penalties. The CFEPA penalties are not as severe as the EPA's penalties, which impose criminal fines for willful violations. In contrast, an employer violating the CFEPA may be liable to the employee only for the impermissible wage difference, with interest. Notably, while Title VII caps damages and the EPA limits the types of recoverable damages, the CFEPA does neither.

No Double Recovery. Under the CFEPA, if an employee files claims under both the EPA and the CFEPA and recovers damages under both, the employee must return to the employer the lesser amount recovered under either law.

Recordkeeping Requirements. The CFEPA adopts federal recordkeeping requirements already established by the U.S. Department of Labor for the Fair Labor Standards Act (FLSA). Interestingly, the CFEPA does not define "employer," but a conservative approach would be to presume coverage for all Alabama employers. The FLSA requires employers to keep certain records regarding employee pay for three years, as opposed to one year under Title VII.

Statute of Limitations. Like the EPA, the CFEPA has a two-year statute of limitations, but the CFEPA does not have the EPA's three-year limit for willful violations. As for Title VII compensation discrimination claims, an employee must file with the U.S. Equal Employment Opportunity Commission (EEOC) within 180 days. Before the enactment of the Lilly Ledbetter Fair Pay Act of 2009, the last day to file a pay claim was either two years or 180 days after the alleged discrimination for EPA and Title VII claims respectively. The Lilly Ledbetter Act significantly expanded the limitations period by counting each paycheck containing discriminatory compensation as a separate violation, regardless of when the discrimination began.

The CFEPA is silent on how it relates to the Lilly Ledbetter Act, so it is unclear how Alabama courts will interpret the limitations period. Alabama courts may embrace a more conservative approach and find that the limitations period begins when the employee obtains notice of the discrimination.

State Court Versus Federal Court. The enactment of the CFEPA raises this question: Will Alabama state court employment claims increase? A similar question arose upon adoption of the Alabama Age Discrimination in Employment Act, but an uptick in state claims never followed, presumably because of the statute's ambiguous language. Many attorneys may not want to be the first to test an uncharted statute when the federal path is already paved. Time will tell as the CFEPA goes into effect.

Bypassing Federal Agencies. Federal law currently provides a path straight to court for compensation discrimination claims. EPA claimants can head to court without filing an EEOC charge. Moreover, while Title VII race-based claims require an initial EEOC charge, an employee can bypass the agency by filing a claim under 42 U.S.C. § 1981. Although rare, Section 1981 claims afford employees a route to federal court for race claims when they miss the 180-day deadline for filing an EEOC charge. Now, the CFEPA may provide a path straight to state court for race-based pay claims that would be untimely under existing federal law.

How Can Alabama Employers Prepare to Comply With the CFEPA?

Given the impending effective date of the law, Alabama employers may want to consider taking the following actions.

  • Avoiding wage history requests and/or restructuring the question. Given that many states are banning the wage history question, and that the CFEPA creates liability for wage-history discrimination, employers may decide to avoid asking altogether, absent a compelling reason. Employers that are currently using the question to set starting salary, may want to ask for the applicant's salary expectations, rather than salary history.
  • Establishing clear and defensible compensation policies and pay practices. It is prudent periodically to review compensation policies and practices to ensure they are useful and that minimal deviation occurs.
  • Documenting compensation policies and decision-making in evaluating pay equity. Compensation decisions can be challenging to defend without accurate records documenting the reasons behind compensation decisions. Consider documenting each element used to establish compensation for a given employee, to the extent possible. Common examples of data points that are useful in explaining compensation include time in position, education level, years of relevant experience, certifications, knowledge and/or skills, and applicant salary expectations/negotiations.
  • Maintaining written, specific, and current information on job content, skill levels, essential functions, performance requirements, reporting structure, etc. Although not required, job descriptions outlining positions' required or preferred knowledge, skills, and abilities can be useful in establishing and justifying the salaries of new and current employees.
  • Conducting a proactive, privileged, and voluntary analysis of compensation with the appropriate subject matter experts as a first step to limit legal risk. Considering all aspects of a company's compensation levels may be appropriate to uncover latent inconsistencies that may have emerged due to a variety of factors.

A version of this article was published in the September 2019 issue of HR Professionals Magazine.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions