On 11 June 2019, Alabama Governor Kay Ivey signed into law the Clark-Figures Equal Pay Act (the ‘Alabama EPA’). The Alabama EPA provides that it shall be unlawful for an employer to:
‘pay any of its employees at wage rates less than those paid to employees of another sex or race for equal work within the same establishment on jobs the performance of which requires equal skill, effort, and responsibility, and performance under similar working conditions.’
The Alabama EPA takes effect on 1 September 2019. Previously, employers and employees in Alabama were subject to the federal Equal Pay Act (the ‘EPA’). Similar to the EPA, no discriminatory intent has to be proven under the Alabama EPA, and an employee can recover the wage differential plus interest. In contrast to the EPA, the Alabama EPA does not permit recovery of liquidated damages (that is, double the amount of the wage differential) or legal representatives’ fees. Also in contrast to the EPA, the Alabama EPA requires parity in wages based on race as well as sex. The Alabama EPA specifically permits wage differentials resulting from a merit system, a seniority system, or a system that measures earnings by quantity or quality of production. An employer may also raise a defence that the wage differential was based on a factor other than sex or race, although the final version of the Alabama EPA does not provide any examples of such factors.
The Alabama EPA further provides a new cause of action for wage-history discrimination providing that it shall be unlawful to ‘refuse to interview, hire, promote, or employ an applicant’ or to retaliate against an applicant for failing to provide wage history. For any violation of this provision, the employee shall receive wages lost as a result of the violation plus interest. Any cause of action brought under this provision must be brought within two years of the violation.
Employers in Alabama should immediately review their pay policies and wage rates to identify wage differentials between employees of different races or genders and to correct any disparities that are not due to one of the four factors permitted by the Alabama EPA. Employers should also give thoughtful consideration to whether wage history from applicants is needed during the hiring process and train all employees involved in the hiring process that failure or refusal to provide wage information or history may not be used as a basis for excluding an applicant.
