When employees who hold the same job position are paid differently, the disparity in earnings is usually a matter of merit, productivity, or seniority. For instance, someone who's been working with a company for thirty years may be paid significantly more for their loyalty than a new hire. Likewise, someone with more skills or better work habits than their co-worker can and may receive a higher compensation. As long as the criteria for deciding employee compensation is based on skills, qualifications, and other job-related attributes, federal law doesn't prohibit an employer from paying its employees different salaries or wages. Employers, however, should be aware that pay disparities motivated by discriminatory factors are illegal under federal discrimination laws. For example, under the Equal Pay Act, employers must pay men and women equal pay for equal work that requires equal skill, equal effort, and equal responsibility. If men and women aren't being paid the same for substantially equal work, then the disparity can be deemed discriminatory and consequently, illegal. Companies attempting to rectify situations involving pay disparities must raise the pay of the employee who is being paid less. It's illegal to reduce the pay of one gender to match the lower pay of the other. All employers subject to the Fair Labor Standards Act must comply with the equal pay requirements. The Civil Rights Act provides additional protection to those employees experiencing pay disparities motivated by race, color, religion, or national origin.
